Sales Tax Partially Applies to Vehicles Purchased with Grant from Veterans Affairs in Tennessee

Wednesday, December 12th, 2018

Adaptive automobiles in a car lot.

Tennessee recently released a notice clarifying how sales tax applies to automobiles purchased using a Veterans Affairs (VA) Automobile Grant. The VA provides a once in a lifetime grant towards the purchase of a new or used vehicle for qualifying service members or veterans with a service-connected disability. The portion of the price paid by the VA grant is taxable.

However, the portion of the purchase price in excess of the grant is exempt. Dealers must determine the taxable and exempt portion of the purchase price. The notice provides examples of how to figure these amounts.

The VA publishes a new maximum grant amount annually on October 1. The maximum VA automobile grant for October 1, 2018, through September 30, 2019 is $21,058.69. Note that exemptions for (1) automobile adaptive equipment (ASSE) or (2) mobility enhancing equipment may also apply.

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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at or call 866.578.8193.

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