Tennessee Code Title 67. Taxes and Licenses § 67-5-217

(1) Is moving in interstate commerce through or over the territory of this state; or

(2) Was consigned to a warehouse within this state from outside this state, for storage, in transit, to a final destination, whether specified when transportation begins or afterwards, that is also outside this state,

shall be deemed not to have acquired a situs in this state for purposes of ad valorem taxation.

(b)(1) Tangible personal property transported to a plant, warehouse or establishment within this state, from outside this state, for storage or repackaging, and held for eventual sale or other disposition, other than at retail, to a destination, whether specified when transportation begins or afterwards, that is outside this state, shall be deemed not to have acquired a situs within this state for purposes of ad valorem taxation.

(2) In the event such tangible personal property mentioned in subdivision (b)(1) is held for sale or eventual disposition to destinations both within and without this state, then this exemption shall be applicable to that percentage of the value of such tangible personal property, in the same proportion that sales or other dispositions to final destinations outside of this state, during the preceding year, bears to the total sales or dispositions of such tangible personal property during such preceding year.