The Tennessee Department of Revenue has rescinded Notice 12-19, which indicated that the Department was going to impose sales tax on compressor fuel that propels natural gas through pipelines in the state. Notice 13-03 issued on April 18, 2013 indicated that the State has reconsidered its position that tax should collect sales tax on compressor fuel "consumed" in the state. No details are provided regarding the Department's decision; however, Tennessee Supreme Court precedent plainly holds that such fuel is not taxable.
As part of the Notice, the Department has requested that interested parties submit comments and that meetings will be held with those interested parties to determine the future applicability of the sales tax to these transactions. Accordingly, interested parties should reach out to the Depatment to provide comments and participate in the discussion process.
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