SAP AMERICA, INC. v. DAVID GERREGANO, COMMISSIONER OF REVENUE, STATE OF TENNESSEE - Articles

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SAP AMERICA, INC. v. DAVID GERREGANO, COMMISSIONER OF REVENUE, STATE OF TENNESSEE

Posted by: Azya Thornton on May 13, 2026

Court: TN Court of Appeals

Attorneys 1: Jonathan Skrmetti, Attorney General and Reporter, J. Matthew Rice, Solicitor General, and Mary Ellen Knack, Senior Assistant Attorney General, for the appellant, Commissioner of Revenue for the State of Tennessee.

Attorneys 2: Christopher A. Wilson, Michael A. Cottone, and G. Michael Yopp, Nashville, Tennessee, for the appellee, SAP America, Inc.

Judge(s): BENNETT

The Tennessee Department of Revenue issued a business tax assessment against a company based on the company’s gross receipts from sales of computer software, cloud hosting, and cloud-based services. The company challenged the assessment by filing a complaint in the chancery court. Both parties filed motions for summary judgment. The court granted summary judgment to the company, finding that the sales of computer software and cloud hosting were not subject to business tax. The court upheld the Tennessee Department of Revenue’s assessment of business tax against the company’s sales of cloud-based services. Lastly, the court found that the company was the prevailing party and awarded the company attorney’s fees pursuant to Tenn. Code Ann. § 67-1-1803(d). The Tennessee Department of Revenue appealed. Discerning that the court erred in its determination that the company’s cloud hosting sales were not subject to business tax, we reverse that portion of the court’s decision. Because this affects the attorney’s fees award, we vacate the award of attorney’s fees and remand for further proceedings. We affirm the trial court in all other respects.

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