Bass, Berry & Sims attorney Steve Jasper provided insight on a recent Tennessee Court of Appeals ruling that a pharmaceutical manufacturer’s sales to specialty distributors are exempt from Tennessee business tax. The court held that since the sale of the drugs are wholesaler-to-wholesaler – and not wholesaler-to-retailer – the sale is not subject to the business tax.
Steve, who represents clients before Davidson County Chancery Court with similar cases, said the ruling addresses a long-standing dispute between pharmaceutical manufacturers and the Tennessee Department of Revenue.
Steve added, “The opinion is likely to be signiﬁcant for pharmaceutical manufacturers that ship through Tennessee distributors. … there is an opportunity for those manufacturers to ﬁle refund claims if they paid business tax on these transactions.”
The full article, “Tennessee Court Rules for Drug Manufacturer in Business Tax Dispute,” was published by Tax Notes State on February 28 and is available online (subscription required).