(a) It is declared to be the legislative intent that this title be liberally construed in favor of the jurisdiction and powers conferred upon the commissioner of revenue.
(b) The commissioner shall have and exercise all such incidental powers as may be necessary to carry out and effectuate the objects and purposes of this title.
(c) As used in this chapter, unless the context otherwise requires:
(1) “Commissioner” means the commissioner of revenue; and
(a) The commissioner has the powers and shall perform the duties conferred and imposed in this chapter in addition to such other powers and duties as may be conferred and imposed upon the commissioner by law. The commissioner is vested with power to prescribe rules and regulations not inconsistent with law and to prepare such forms as the commissioner may deem proper for the administration of the duties of the commissioner's office.
(b) The department has the power to:
(1) Administer the assessment and collection of all state taxes, except those for which responsibility is expressly conferred by statute upon some other officer or agency;
(2) Administer the assessment and collection of privilege taxes;
(3) Receive state revenues collected by county officials and make and retain records of such receipts;
(4) Investigate the tax systems of other states, and formulate and recommend to the governor such legislation as may be deemed expedient to prevent evasion of taxes, secure just and equitable taxation and improve the system of taxation in the state;
(5) Examine, at any and all times, the accounts of any private corporation, institution, association or board receiving appropriations from the general assembly;
(6) Require a complete record of the officers, assistants and employees appointed by the commissioners of the various departments, and require their salaries to be in conformity with the scale authorized;
(7) Procure from any department or agency of the state, or any of its political subdivisions, a copy of the complete record maintained by it of any convictions for violation of any criminal laws by any person who has made application to the department for employment, for the exclusive use of the department in screening the applicant to determine suitability for an appointment in the department;
(8) Compromise tax liabilities upon such terms as, in the commissioner's opinion, may seem to be in the best interests of the state; provided, that either the comptroller of the treasury or the attorney general and reporter may require that such compromises or any class of such compromises be subject to the comptroller's or attorney general's prior review and written approval. The commissioner may enter into agreements in connection with the compromises as may be necessary to effectuate the purposes of this subsection (b);
(9) Issue letter and revenue rulings at its discretion. A reasonable fee, not to exceed ten thousand dollars ($10,000) for expedited rulings requested pursuant to § 67-1-109(d) and not to exceed five hundred dollars ($500) for all other rulings, may be set and prescribed by the commissioner for issuing revenue and letter rulings; and
(10) Enter into a contract to participate in the multistate tax commission joint audit program.
(c) If a taxpayer challenges an assessment of taxes levied by local government that has been paid to the department, the commissioner shall notify the appropriate agencies of local government of such challenge, if the local amount in dispute exceeds twenty-five thousand dollars ($25,000) per county or city.
(a) The commissioner shall make a careful study and investigation of the tax laws of other states.
(b) It is the commissioner's duty to prepare and transmit to the general assembly on the first day of its organizational session a report of the commissioner's work and the work of the state board of equalization, and to make such recommendations as the commissioner deems best for the interest of the state.
(a) There is created, in the offices of the commissioner and the state treasurer, a special fund to be designated as the tax administration fund, to be kept separate and apart and used to defray the expenses incurred under the tax laws designated in this chapter.
(b) All special appropriations and/or allowances for administration set out in §§ 4-7-112, 67-2-117, 67-2-118, 67-4-1025, 67-8-210, 67-8-401, and 67-8-403 and all other tax laws, the administration of which is entrusted to the commissioner, unless otherwise specifically provided, shall be paid, when and as capable of identification, into the tax administration fund, without deductions for any purpose whatsoever. All provisions of §§ 4-7-112, 67-2-117, 67-2-118, 67-4-1025, 67-8-210, 67-8-401, and 67-8-403 in conflict with this section shall yield to this section.
(c) The expenses arising out of the enforcement of any such tax law, the administration allowance for which has been paid into the tax administration fund, shall be paid from the fund, and no part of such expense shall be paid out of the general fund, unless and until earmarked tax administration funds have been exhausted.
(d) No funds earmarked by this section shall be used except in accordance with the limitations and stipulations of the general appropriations act, unless the governor, state treasurer and comptroller of the treasury certify that an emergency exists and define the exact amount necessary to meet the emergency. The governor, state treasurer and comptroller of the treasury have the right to pass such funds to the general fund whenever they see fit and proper.
(1) In the absence of any other provisions, and except as may otherwise be provided by law, whenever any person is aggrieved and desires a hearing with respect to the final resolution of any issue or question involved in connection with either an application for and entitlement to the issuance of, or the proposed revocation of, any certificate, license, permit, privilege or right, or relating to the confiscation of any property, or any other adverse action proposed or taken to implement any revenue regulatory or registration law administered by the commissioner, not including those laws relating to assessments or levies of taxes, fees, fines, penalties, interest, or the waiver of penalties, such person shall, upon written request made within ten (10) days of the action complained of, be afforded an opportunity for a formal hearing before the commissioner.
(2) Such hearing shall be scheduled within a reasonable time following such request and shall be held after reasonable notice is given in writing by the commissioner to the person aggrieved and requesting such hearing, and such notice shall include a statement of the time, place and nature of the hearing.
(3) Any person afforded such a hearing may respond in person or by attorney, may submit appropriate responsive pleadings, and may present evidence and argument on all issues or questions involved.
(b)
(1) The commissioner may personally hold such hearings as the commissioner may deem proper.
(2) In addition to holding hearings, the commissioner is authorized to designate a hearing officer who may hold such hearings in the place of and in the absence of the commissioner. This authority to designate a hearing officer is also extended to include the conduct of any hearing authorized to be held under any other law. Such hearing officer shall be deemed to be and have the same authority as assistants to the commissioner as provided in § 4-3-1901.
(c)
(1) The commissioner, or any hearing officer designated by the commissioner, may utilize prehearing conferences to simplify or clarify the issues or questions involved and to expedite disposition of a contested denial or revocation of any certificate, license, permit, privilege or right, or any other adverse action or determination of the department, except such as may be specifically excepted from review in this manner.
(2) Unless otherwise precluded by law, informal disposition may be made of any contested action, issue or question by an agreed settlement or consent order.
(d)
(1) At the conclusion of any formal hearing or prehearing conference, or within a reasonable time thereafter, the commissioner shall issue such orders as, in the commissioner's discretion, the pleadings, evidence and argument justify.
(2) If a formal hearing is held by a hearing officer, as authorized in this section, the hearing officer shall make findings of fact, conclusions of law and proposed settlements or orders based thereon for submission to the commissioner within a reasonable time thereafter. If a prehearing conference is held by a hearing officer, as authorized in this section, the hearing officer may make such findings, conclusions and proposed settlements or orders if the circumstances warrant. If the commissioner concurs, the commissioner shall issue the same finding, conclusion, proposed settlement or order made by the hearing officer; or the commissioner may, upon review of the record, make such findings and conclusions and issue such orders as, in the commissioner's discretion, the record justifies.
(a) Upon written request, the commissioner has the discretion to authorize a person to file tax returns and pay taxes collectible by the department on an optional reporting period that is either shorter or not more than seven (7) days longer than the regular statutory reporting period provided by law. An optional reporting period must conform to the accounting period used by the taxpayer in the taxpayer's books of account.
(b) A tax return and payment for an optional reporting period shall become delinquent if not filed or paid before that date that is the same number of days after the close of the optional reporting period as the regular statutory delinquency date is after the close of the regular reporting period. If an optional reporting period tax return or payment becomes delinquent, penalty and interest calculated under the regular statutory methods and rates shall be payable from the date of delinquency.
(c) A person authorized to use an optional reporting period shall continue on that basis until such person notifies the commissioner of an intention to revert to the regular statutory reporting period, or receives authorization from the commissioner to use a different optional reporting period. A person who elects to file tax returns and make payments on an optional reporting basis period shall be required to use that period for reporting and paying all taxes collectible from such person by the department.
(a) Any tax report, claim, appeal, return, statement, remittance or other tax document required or authorized to be filed with or any payment made to the state or to any political subdivision of the state, that is:
(1) Transmitted through the United States mail or any alternative delivery service as authorized by § 7502 of the Internal Revenue Code (26 U.S.C. § 7502) shall be deemed filed and received by the state or political subdivision on the date shown by the post office cancellation mark stamped on the envelope or other appropriate wrapper containing it;
(2) Mailed but not received by the state or political subdivision, or where received and the cancellation mark is illegible, erroneous or omitted, shall be deemed filed and received on the date it was mailed, if the sender establishes by competent evidence that the tax report, claim, appeal, return, statement, remittance or other tax document was deposited in the United States mail; provided, that in cases of such nonreceipt of a tax report, claim, appeal, return, statement, remittance or other tax document required by law to be filed, the sender files with the state or political subdivision a duplicate thereof within ten (10) days after written notification is given to the sender by the state or political subdivision of the nonreceipt of such tax report, claim, appeal, return, statement, remittance, or other tax document; or
(3) Transmitted as provided in subdivision (a)(1) to the state or political subdivision and postmarked or delivered no more than twenty-four (24) hours subsequent to the last date for the timely filing of such document or payment, shall not be considered delinquent and shall preserve any rights otherwise dependent on timely filing; however, any such document or payment, transmitted as provided in subdivision (a)(1) to the state or political subdivision and postmarked or delivered more than twenty-four (24) hours subsequent to the last date for timely filing, shall be subject to any late charges, penalty or interest otherwise chargeable without regard to the twenty-four-hour grace period as provided in this subdivision (a)(3).
(b) When any tax report, claim, return, statement, remittance or other tax document is sent by United States registered mail, certified mail or certificate of mailing, a record authenticated by the United States postal service of such registration, certification or certificate shall be considered competent evidence, for the purposes of subdivision (a)(2), that the tax report, claim, return, statement, remittance or other tax document was mailed on the date of registration, certification or the certificate of mailing, if such record is accompanied by other competent evidence that the original of the duplicate furnished was contained in the envelope or other appropriate wrapper that is identified in the record so authenticated.
(a) It is the commissioner's duty to implement and enforce the laws administered by the commissioner under this or any other title. The commissioner shall enforce these laws in a manner consistent with all applicable statutes, rules, and regulations. When the commissioner publishes guidance regarding the taxability of any privilege, affected taxpayers are entitled to rely on the guidance. If the commissioner changes the guidance, then a taxpayer who relied on the guidance before it was changed is not liable for any assessment of additional tax, interest, or penalty that accrued before the guidance was changed and was unpaid because of the taxpayer's reasonable reliance upon the guidance.
(b) If a taxpayer is either audited by the department or requests specific advice from the department and receives erroneous audit findings or advice, then the taxpayer is not liable for any assessment of additional tax, interest, or penalty attributable to the erroneous finding or advice furnished by the department, to the extent the following conditions are all satisfied:
(1) The finding or advice was reasonably relied upon by the taxpayer. In determining whether the reliance was reasonable, the taxpayer is deemed to be aware of any changes in applicable law that occurred after the finding or advice was furnished by the department;
(2) The additional assessment did not result from the taxpayer's failure to provide adequate or accurate information; and
(3) The department provided the finding or advice to the taxpayer in writing or the department's records establish that the department provided erroneous verbal advice to the taxpayer. In furtherance of this condition, the department shall adopt formal audit procedures to allow taxpayers the right to memorialize audit findings in the final audit document prepared by the audit division upon completion of the audit.
(c) If the commissioner changes the policy of the department as to the taxability of any privilege, then the policy change must be applied to the exercise of those privileges occurring after the date of the policy change only, unless otherwise provided by law.
(d) The commissioner is encouraged to continue providing and publishing guidance and advice to taxpayers to assist with compliance with this state's tax statutes. Except as specifically provided in this section, the issuance of guidance, advice, or audit findings by the commissioner does not constitute new or revised enforcement of the law.
(e) This section is intended only to prevent audit assessments against taxpayers that reasonably relied upon guidance, advice, or prior findings communicated to the taxpayer by the department. Such guidance, advice, or findings do not have the force and effect of law and do not independently establish a basis for a claim for refund under § 67-1-1802. Any claim for refund must be based on applicable statutes, rules, and regulations.
(f) The department shall designate as public guidance applicable, published manuals, notices, and statements.
(g) As used in this section:
(1) “Audit finding” or “finding”:
(A) Means the specific conclusions contained in the final document written by the audit division or hearing office and presented to the taxpayer upon completion of an audit or an informal conference conducted to review an audit;
(B) Includes findings memorialized in the final document written by the audit division pursuant to the procedures established under subdivision (b)(3); and
(C) Does not include the issuance of a license, certificate, or application approval;
(2) “Published” means displayed on the department's website; and
(3) “Published guidance” or “guidance”:
(A) Means tax manuals, important notices, statements presented in a question-and-answer format, or other substantive statements regarding the taxability of a privilege that are published on the department's website; and
(B) Does not include verbal comments from an auditor or letter rulings or revenue rulings, as described in § 67-1-109, that are redacted and placed on the department's website.
(a) The commissioner has the power to issue revenue and letter rulings, at the commissioner's discretion.
(b) Revenue rulings shall be statements regarding the substantive application of law and statements of procedure that affect the rights and duties of taxpayers and other members of the public. Revenue rulings shall be advisory in nature and shall not be binding upon the department.
(c)
(1) Letter rulings shall interpret and apply the tax law to a specific set of existing facts furnished by a particular taxpayer. These rulings shall be binding upon the department and are applicable only to the individual taxpayer being addressed.
(2) Letter rulings can be revoked or modified by the commissioner at any time. Such revocation or modification shall be effective retroactively, unless the following conditions are met, in which case the revocation shall be prospective only:
(A) The taxpayer must not have misstated or omitted material facts involved in the transaction;
(B) Facts that develop later must not be materially different from the facts upon which the ruling was based;
(C) The applicable law must not have been changed or amended;
(D) The ruling must have been issued originally with respect to a prospective or proposed transaction; and
(E) The taxpayer directly involved must have acted in good faith in relying upon the ruling, and a retroactive revocation of the ruling must inure to the taxpayer's detriment.
(d) When prompt consideration of an issue is needed, a party can request an expedited letter or revenue ruling by expressly requesting an expedited ruling and by submitting the fee required to receive an expedited ruling, as such fee is established by the commissioner. When an expedited letter or revenue ruling is requested as provided in this subsection (d), the commissioner shall either issue a ruling within sixty (60) days of the date on which the request for an expedited ruling was submitted or deny the request and return the fee to the requesting party within seven (7) days of the date on which the request was submitted.
(e) Requests for revenue and letter rulings shall be submitted in the form and manner prescribed by regulations issued by the commissioner.
(f) A reasonable fee may be set and prescribed by the commissioner for issuing revenue and letter rulings. The fee shall not exceed ten thousand dollars ($10,000) for expedited revenue or letter rulings requested pursuant to subsection (d) and shall not exceed five hundred dollars ($500) for all other revenue and letter rulings.
(a) This section shall be known and may be cited as the “Tennessee Taxpayer Bill of Rights.”
(b) The commissioner shall promulgate rules, regulations and adopt policies which would inform and advise taxpayers of their rights and would guarantee Tennessee taxpayers are treated with fairness, courtesy and common sense.
(c) The rules, regulations, and policies shall be known as the “Tennessee Taxpayer Bill of Rights,” shall be consistent with existing law and shall include, but not be limited to, the following provisions:
As a taxpayer of Tennessee, you have a right to:
(1) Receive fair and courteous treatment from all the department's employees;
(2) Receive tax forms and information written in plain language;
(3) Receive prompt and accurate responses to all questions and requests for tax assistance;
(4) Request public records;
(5) Be assured that the department will keep confidential the financial information you give it;
(6) Know the department's policies with respect to use and retention of personally identifiable information;
(7) Receive tax notices that provide an explanation of the amount being billed;
(8) Receive a clear set of rules and procedures to resolve tax problems that arise from the interpretation and administration of Tennessee's tax laws;
(9) Dispute any proposed assessment by filing a timely request for an informal conference;
(10) Know that the department's employees are not paid or promoted as a result of money billed to or collected from taxpayers;
(11) Suggest ideas about how the department can better serve you;
(12) Prompt notification by the department of any refund to which you are entitled;
(13) Attend annual meetings held by the department in convenient locations to voice your suggestions;
(14) A ten-day notice before a levy on assets is enforced;
(15) A thirty-day notice before seized assets are liquidated;
(16) A speedy, informal, and inexpensive review of a proposed assessment in an informal conference with an impartial representative of the department and to be represented by an attorney, certified public accountant, or other representative; and
(17) Any other rights the commissioner deems necessary and appropriate.
(d) This section only applies to the state government of Tennessee.
The rate of any tax levied on the activity of harvesting or severing from the ground row crops, timber or other plants shall be equal and uniform in every county in the state. However, any such tax levied by private act or otherwise prior to July 30, 1997, shall remain valid and in effect, but the rate of tax shall not be increased by private act after July 30, 1997. No such tax shall be levied by any city or county after July 30, 1997, unless authorized by general law.
The business tax is a privilege tax imposed upon persons engaged in various businesses and activities in the state. If a dealer invoices the business tax as a separate item and passes it on to the dealer's customers, then the tax shall be added to the gross receipts and be used in determining the tax base for both business tax and sales and use tax purposes.
(a) All persons and entities subject to any tax administered by the commissioner shall keep and preserve suitable records from which the taxpayer and the commissioner can determine the Tennessee tax liability, if any. All such records shall be open to examination at all reasonable hours by the commissioner or any authorized agents of the commissioner. If the taxpayer maintains any such records in an electronic format, the taxpayer shall comply with reasonable requests by the commissioner or the commissioner's authorized agents to provide those electronic records in a standard record format.
(b) Any taxpayer who fails to comply with this section shall be assessed taxes, plus any applicable penalty and interest based on the best information available to the department; and the burden shall be on the taxpayer to show by clear and cogent evidence that the assessment is incorrect.
(a) With respect to taxes imposed under chapter 2 of this title, under chapter 4, part 20 or 21 of this title, or under chapter 8, part 1 of this title, whenever the due date for filing the return occurs on a legal holiday as defined under 26 U.S.C. § 7503, the commissioner is authorized, in the commissioner's discretion, to extend the due date of such return to the next succeeding day that is not a Saturday, Sunday or legal holiday.
(b) With respect to taxes administered and collected by the commissioner of revenue, whenever the internal revenue service generally extends for all taxpayers the due date of a federal return or extends the due date of such return for a specified group of taxpayers such as, but not limited to, those affected by a federally declared disaster, the commissioner of revenue is authorized, in the commissioner's discretion, to extend the due date for the filing of specified returns to a date that shall not be later than the last day of the extension period specified by the internal revenue service.
(c) For purposes of this section, “return” shall be deemed to include any remittance or other tax document, including, but not limited to, quarterly estimated payments and extension requests.
(a) The commissioner is authorized to require that any return, report, claim, statement, application, or other document filed with the department, including any payment or remittance that accompanies such document, be submitted electronically in a manner approved by the commissioner beginning no sooner than ninety (90) days after the commissioner has certified that a system is in place for the electronic submission of such document or payment. Such certification shall be accomplished by the commissioner prominently posting a notice on the department's website.
(b) If an electronic filing requirement imposed pursuant to the authority granted in subsection (a) creates a hardship upon the person subject to the requirement, such person shall be permitted to file the applicable document in paper form. The commissioner is authorized to require that any such paper filing be accompanied by a manual handling fee, not to exceed twenty-five dollars ($25.00), that is reasonably calculated by the department to account for the additional cost of preparing, printing, receiving, reviewing and processing any paper filing so permitted.
(c) This section shall apply to any tax, regulatory, or other law administered by the department of revenue under this or any other title. This section shall not, however, be construed to supersede or otherwise affect any electronic filing or payment requirement already provided by law on January 1, 2012, including any penalty or waiver provisions connected therewith, and shall not require the certification of any system already in place before January 1, 2012.
(d) Notwithstanding any law to the contrary, the cumulative total of manual handling fees charged to any one (1) taxpayer for all tax filings in any twelve-month period shall not exceed fifty dollars ($50.00).
(e) The department shall notify each taxpayer that the cumulative total of all manual handling fees for all paper returns, reports, claims, statements, applications, or other documents filed with the department, including any payments or remittances that accompany such documents, shall not exceed fifty dollars ($50.00) for all such filings in any twelve-month period. The department shall include such notice in any one (1) regularly scheduled communication between the department and the taxpayer.
Notwithstanding any law to the contrary, the commissioner is authorized to deduct and retain from the proceeds of any tax administered and collected by the commissioner an amount necessary to offset the fee paid to a third party for the processing of documents and payments that are submitted electronically to the department.
Notwithstanding any provision to the contrary, when any provision administered by the commissioner requires that any document be filed, submitted, or retained in paper, microfiche, or any other nondigital format, the commissioner is authorized to permit the filing, submission, or retention of such document in a digital format.
The commissioner of economic and community development, in consultation with the commissioner of revenue, shall conduct a review of the credits found in §§ 67-4-2009, 67-4-2109, and 67-6-224. The review shall evaluate the previous four (4) fiscal years and may include an evaluation of the purpose of the credit, foregone revenue to the state as a result of the credit, any benefits provided to the state as a result of the credit, and the estimated indirect economic impact of the tax credit, where applicable. The report shall include a recommendation to modify, discontinue, or take no action with respect to each credit. The departments shall prepare a report of their findings and recommendations and shall deliver such report to the governor, the speakers of both houses, the finance, ways and means committees of both houses, and the office of legislative budget analysis no later than January 15, 2017. The review required by this section shall be conducted by the departments, and the report delivered to the governor, the speakers of both houses, the finance, ways and means committees of both houses, and the office of legislative budget analysis, each four (4) years thereafter.
(a) There is created in the office of the comptroller of the treasury a division of property assessments.
(b) The comptroller of the treasury is authorized, with the approval of the state board of equalization, to appoint a director, who shall be the head of the division.
(c) The division of property assessments is authorized to employ such assistants as are deemed necessary by the comptroller of the treasury to enable the division to efficiently and thoroughly perform its duties.
(d) All expenses of the division, including salaries of its director and other employees, shall be paid out of moneys appropriated by the general assembly and made available to the comptroller of the treasury by law.
(a) The division of property assessments, under the supervision of the comptroller of the treasury, and subject to such policies, rules and regulations as may be adopted by the state board of equalization, has and shall perform the following duties, to:
(1) Supervise and direct all reappraisals and revaluation programs to the cost of which the state of Tennessee contributes;
(2) Prescribe rules and regulations approved by the comptroller of the treasury and not otherwise reserved for the state board of equalization and not inconsistent with laws that relate to the administration of the duties of assessors of property;
(3) Prepare, furnish and require the use by assessors of such forms as may be required for the administration of the duties of assessors of property, and approve all forms, schedules and reports used by assessors and sent to taxpayers for reporting real or personal property;
(4) Obtain evidence, information and statistics relative to the value of property to be assessed and equalized;
(5) Require assessors to furnish reports under oath, giving specific information relating to assessments and other facts concerning properties and facts pertaining to the administration of the duties of the office of assessor;
(6) Effect the assessment of all property in the state in accordance with the state constitution and all statutory provisions. The comptroller of the treasury shall exercise all powers conferred upon the comptroller of the treasury by law to the end that assessments in every taxing jurisdiction may be in accordance with the law;
(7) Make an annual report, approved by the comptroller of the treasury, to the state board of equalization, with an appropriate summary of the work accomplished by the division, and make such recommendations to the state board of equalization as it may deem appropriate;
(8) Assist the state board of equalization in the preparation of an assessment manual or manuals for the appraisal, classification and assessment of property for use by local assessors in making their assessments of particular classes or parcels of property, including the assessment of various kinds of personal property owned and used by corporations, partnerships and individuals engaged in business or professions for profit;
(9) Assist the state board of equalization in conducting the educational and training courses for state and local assessing officials approved by the state board of equalization;
(10) Require that counties or other taxing jurisdictions take whatever steps deemed necessary by the state board of equalization to assure that reappraisal and revaluation programs are maintained and updated in accordance with instructions, policies, rules and regulations as adopted by the state board of equalization;
(11) At the direction of the state board of equalization, provide assessment services for any municipality which lies within the boundaries of two (2) or more counties and which has contracted for such services with the state board of equalization under § 67-1-307(a) and (b); and
(12) At the direction of the state board of equalization, provide for the appraisal of leasehold interests, mineral interests, or other fractional interest in any county which has petitioned for such assistance to the state board of equalization under § 67-1-307(a) and (b).
(b) The division of property assessments has the authority to go upon land in order to obtain information for the assessment of such property. If the landowner refuses or objects to entry upon the landowner's land, the division may petition the circuit or chancery court for an order allowing entry at a specified time for purposes of appraising the land and improvements for assessment purposes.
(c) The division of property assessments shall have the unconditional right to intervene in any contested case before the state board of equalization and shall have standing and be recognized as a party under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. This unconditional right to intervene shall be liberally construed in favor of the division of property assessments and the intervention and participation in any contested case before the state board of equalization shall not be limited in any manner except as otherwise agreed to by the division of property assessments.
Nothing in §§ 67-1-201 — 67-1-204 shall be construed to diminish or to duplicate the duties of the commissioner with respect to assessment and collection of privilege taxes.
It is declared to be the legislative intent that §§ 67-1-201 — 67-1-204 be liberally construed in favor of jurisdiction and powers conferred upon the division of property assessments, the comptroller of the treasury and the state board of equalization, and they and each of them have and shall exercise all such incidental powers as may be necessary to carry out and effectuate the objectives and purposes of §§ 67-1-201 — 67-1-204, and to equalize the assessment of all property subject to taxation as provided by law.
(a) It is the duty of the division of property assessments, under the direction and supervision of the state board of equalization, to undertake the development of methods and procedures to assist and guide local assessors of property and boards of equalization in officially administering the annual assessment process and in maintenance of assessments through a process of updating valuations, property ownership records and other information and records required by sound assessment practices.
(b) The board may promulgate rules and regulations to provide for such a system of assessments and to prescribe the participation in the system of assessments of local assessors of property and boards of equalization.
(a) The board may require that local assessors of local property and boards of equalization submit to the division of property assessments such information as may be necessary to provide for the analysis of assessments and the continued maintenance of ownership, appraisal, classification, and assessment information.
(b) Based upon the information provided by local assessors of property and boards of equalization, the division of property assessments shall provide to such local taxing jurisdictions, as may be determined by the state board of equalization, the continued maintenance of ownership index cards, property record cards, assessment rolls, tax rolls, tax bills, tax receipts, and such other information as may be required by the state board of equalization.
(a) The state board of equalization shall meet in Nashville annually on the second Monday in August to set dates and places for its hearings of appeals from actions of local boards of equalization, and to consider such other matters as may come before the board.
(b) A majority of the board shall constitute a quorum for the transaction of business.
(c) It is the duty of the board to sit for a portion of its allotted time in the western division of the state and in the eastern division of the state, in addition to its sessions at Nashville, the time and place of the sessions to be held at other points than Nashville to be designated by the board, and publication of such time and place or times and places to be made through the press.
(d) Taxpayers and property owners, without further notice than this section and due publication of the times and places of the meetings of the board as required by this section, are charged with notice of the sessions.
(e) Such sessions shall continue from time to time and day to day until the equalization of all assessments is completed.
(f)
(1) In addition to the annual meeting required in subsection (a), the board shall meet at other times and places as the board may find necessary to carry out its duties and responsibilities.
(2) Such meetings may be held upon the call of the chair or vice chair when the public business so requires.
(3) A majority of the board shall constitute a quorum for the transaction of business.
(a) All necessary and proper expenses incurred by the board in the performance of its duties imposed under this title shall be paid out of the funds appropriated to the division of property assessments.
(b) All reimbursement for travel expenses shall be in accordance with the comprehensive travel regulations as promulgated by the department of finance and administration and approved by the attorney general and reporter.
(a) It is the duty of the members to discharge the duties of the board without compensation, except those expenses provided for in § 67-1-302 and except as provided in subsection (b), but before entering upon the discharge of such duties, the members shall take and subscribe to an oath that the members will fairly and impartially perform the duties imposed upon them by the laws of the state of Tennessee. The oath shall be taken before some person authorized by law to administer an oath and be filed in the office of the secretary of state for preservation.
(b)
(1) Persons who are not officials of the state of Tennessee and who may, from time to time, serve as members of the state board of equalization shall be paid at the rate of fifty dollars ($50.00) per day for each day or part of a day in attendance at meetings of the state board of equalization.
(2) Such members who are not state officials shall be reimbursed necessary travel and per diem expenses as prescribed in the comprehensive travel regulations by the commissioner of finance and administration for employees of the state of Tennessee, during such service on the state board of equalization, or travel to or from a meeting of the state board of equalization.
(1) Make such rules and regulations and prepare such forms as it may deem proper for its use;
(2) Obtain such evidence, information and statistics as may be deemed material as to the values, classifications and assessments of properties to be equalized;
(3) Regulate and prescribe the method of taking evidence before the board, whether by affidavit, deposition or otherwise;
(4) Send for papers and witnesses;
(5) Compel the attendance of witnesses and administer oaths to witnesses; and
(6) Do and perform all such acts as may be proper or necessary to accomplish the purpose of its creation.
(b) The board may issue subpoenas for witnesses, and place them in the hands of any executive officer of any county in this state whose duty it shall be to immediately execute them, and make due returns of the subpoenas.
(a) All the agents and assistants appointed by the board have full power to administer oaths, take affidavits and depositions, and otherwise exercise all powers necessary to gather evidence by compelling the attendance of witnesses, the production of books and papers, and exercising all the powers of commissioners or clerks of courts in taking depositions.
(b) The agents and assistants appointed by the board may issue subpoenas for witnesses and place them in the hands of any executive officer of any county whose duty it shall be to immediately execute the subpoenas and make due return of the subpoenas.
(c) Any assistant appointed by the board to gather such evidence shall not receive any fee or emolument other than the assistant's agreed salary and actual necessary expenses.
(d) Witnesses and sheriffs or constables executing process shall receive the same compensation as is fixed by law for like service in a court of record.
(1) The board is authorized to contract with the governing body of any county, or the governing body of any incorporated city or town, to furnish to any county or incorporated city or town such personnel, supplies, funds and technical assistance as may be needed to carry out a program of assessment, reassessment or equalization of property taxes.
(2) Upon the petition by a municipality that lies within the boundaries of two (2) or more counties, the board may enter into a contract with such municipality to provide the assessment services allowed under § 67-1-513.
(3) No contracts authorized by this section shall be entered into after January 1, 1974, by the board with any governing body other than those of counties, except that the board may enter into contracts with municipalities that lie within the boundaries of two (2) or more counties and who petition for assessment services allowed under § 67-1-513.
(b) The board shall establish rules and regulations that shall constitute a part of every contract of assistance. Such rules and regulations shall provide that the over-all cost incurred by the board shall be repaid to the board and shall state the terms and conditions on which such assistance shall be rendered including the interest charge, if any, on loans made, and such other rules and regulations as will adequately ensure the satisfactory completion of such programs.
(c) All funds appropriated to the board for the purpose of carrying out this section shall be kept in a special account by the board from which assistance shall be rendered, and funds repaid to the board under any contract shall be credited to the account and applied to any lawful obligation of the account.
(d) In the event of a default by a county, town or city in the payment or repayment of funds due under a contract, the board shall notify the comptroller of the treasury of the default and the amount of the default; it shall then be the duty of the comptroller of the treasury to have paid over to the board out of any state-shared taxes due the defaulting county, city or town sums sufficient to pay the amount in arrears under the contract.
(e) The assistance authorized by this section shall be supplemental to and administered separately from that authorized by title 4, chapter 3, part 51.
The board may provide the use of computer facilities and services reasonably available from the state of Tennessee to such local taxing jurisdictions as the board determines do not have available adequate computer or similar services, and shall make a charge for the reasonable cost of the computer facilities and services to such local taxing jurisdictions in accordance with services rendered.
(1) The county legislative body of each county shall, at the April session of each even year, from the different sections of the county, elect, for a term of two (2) years, five (5) freeholders and taxpayers who shall constitute a county board of equalization.
(2) In any county having a population greater than nine hundred thousand (900,000), according to the 2010 federal census or any subsequent federal census, the county board of equalization shall be appointed for a term of two (2) years, consisting of thirteen (13) freeholders and taxpayers, of which three (3) members shall be appointed by the county commission or governing board, four (4) members shall be appointed by the city council or governing board of the largest municipality, and one (1) member each shall be appointed by the city councils or governing boards of each of the six (6) largest remaining cities having a population greater than ten thousand (10,000).
(3) In counties having one (1) or more cities with a population exceeding sixty thousand (60,000), according to the federal census of 1970 or any subsequent federal census, two (2) of the members of the board shall be appointed by the governing body of the largest city.
(4) In counties having one (1) or more cities with a population of not less than ten thousand (10,000) nor more than sixty thousand (60,000), one (1) member of the board shall be appointed by the city council or governing body of each of the two (2) largest cities with a population in excess of ten thousand (10,000), within the county.
(5) In counties that have no city with a population of ten thousand (10,000) or more, one (1) member of the board shall be appointed by the city council or governing board of the largest city or town in the counties.
(6)
(A) In a county with a metropolitan form of government, the charter for the metropolitan government may provide for the creation of a metropolitan board of equalization consisting of either five (5) or seven (7) members. Appointments to such board shall include members selected from minorities, as well as members of the sex that historically has been under-represented on the board of equalization. This subdivision (a)(5)(A) shall not apply to such counties having a population of less than ten thousand (10,000), according to the 1980 federal census or any subsequent federal census.
(B) If a county with a metropolitan form of government having a population of not less than four hundred seventy thousand (470,000) nor more than five hundred thousand (500,000), according to the 1980 federal census or any subsequent federal census, creates a board of equalization consisting of seven (7) members, at least two (2) of the members of the board shall be appointed consistent with subdivision (a)(6)(A).
(b) If the county legislative body fails to elect, the county mayor shall appoint the members of the board and shall also fill such vacancies as the vacancies occur.
(c)
(1) Magistrates or state, municipal or county legislative or executive officials or employees shall all be ineligible for positions on a county board of equalization, but this prohibition does not apply to persons who receive only compensation in lieu of expenses or a per diem payment for services. No member of any county board of equalization shall represent any taxpayer in an assessment appeal. This subsection (c) does not apply to municipal officials or employees whose city, located in a county with a population of eight hundred thousand (800,000) or more, according to the 1990 federal census or any subsequent federal census, is not eligible to appoint a member to the board.
(2)
(A) Notwithstanding other provisions of this subsection (c), except in counties having a population of more than eighty-five thousand (85,000) but less than eighty-six thousand (86,000), according to the 1990 federal census or any subsequent federal census, state employees may be appointed to the county board of equalization, if their employment responsibilities do not include property assessments, except that in counties having a population of more than eight hundred thousand (800,000), according to the 1990 federal census or any subsequent federal census, state employees shall not be appointed to the county board of equalization.
(B) No state employee serving on the county board of equalization shall be compensated by the state for time served on the county board, except that an otherwise eligible employee may use accumulated annual leave to serve on the county board with approval of the employee's supervisor.
(d) In addition to its regular appointments under this section, an appointing authority may designate one (1) or more alternates, and the board of equalization chair may call upon an alternate to sit for a regular member who becomes unavailable for a particular hearing due to disqualification or other reason. A duly appointed alternate shall be sworn in the same manner as regular members, and any action taken by a duly appointed alternate shall be as effective as if taken by the unavailable individual.
(a) Each member of the county board of equalization, before entering upon the discharge of the duties of office, shall, before the county mayor or other official authorized by law to administer oaths, take and subscribe to the following oath, to be filed with the county clerk, viz.:
“State of Tennessee,
County.
I, , member of the board of equalization of such county do hereby solemnly swear (or affirm) that I will carefully examine, compare and equalize the assessments of such county in accordance with the constitution and the laws of the state of Tennessee; and that to the best of my knowledge and ability I will faithfully, honestly and impartially perform all duties imposed upon me as a member of the board by the laws of the state of Tennessee.
Signed Board member
Sworn to before me, this the day of , .”
(b) On request of the state board of equalization, the county clerk shall make certified copies of such oaths and forward the copies to the state board of equalization. It is unlawful for any member of a county board to enter upon or undertake to discharge the duties of office without first taking, before entering upon the duties of office, the oath provided in subsection (a).
(a) Each county board of equalization shall elect one (1) of its members chair and one (1) secretary of the board.
(b) A majority of the board shall constitute a quorum for the transaction of business.
(c) The board shall keep a daily record of its transactions, and sign the record.
(d) Board members shall be paid by the county a compensation for their services. The county legislative body shall by resolution establish the compensation of the members and the chair of the county board of equalization.
(e)
(1) The county mayor shall require board members and county board hearing officers to complete annual continuing education and training on duties and responsibilities of their office as a condition of appointment or continued service.
(2) The county legislative body shall by resolution establish the minimum of at least four (4) hours of training for board members to complete annually and minimum recordkeeping requirements related to members' certificates of attendance.
(3) The subjects for the training and continuing education shall include board governance, open meetings requirements, and other topics reasonably related to the duties of the members of the county board of equalization.
(4) Any association or organization with appropriate knowledge and experience may prepare a training and continuing education curriculum for county boards of equalization covering the subjects set forth in subdivision (e)(3) to be submitted to the comptroller of the treasury for review and approval prior to use.
(5) Mandatory annual continuing education and training is only required under this subsection (e) to the extent that such education and training is provided by the comptroller of the treasury free of charge.
(a) The county board of equalization and the board of equalization of any metropolitan government organized and existing pursuant to title 7, chapters 1-3 shall, on June 1 each year, meet and sit in regular session as necessity may require until the equalization has been completed; provided, that in any county having a population of not less than twenty-six thousand (26,000) nor more than twenty-six thousand one hundred (26,100), according to the 1970 federal census or any subsequent federal census, the county legislative body may by resolution or ordinance set an earlier date for such board's initial meeting.
(b)
(1) The board shall not sit longer than:
(A) Six (6) days in counties having a population of ten thousand (10,000) or less, according to the 1970 federal census or any subsequent federal census;
(B) Ten (10) days in counties having a population of over ten thousand (10,000) and under twenty thousand (20,000), according to the 1970 federal census or any subsequent federal census;
(C) Fifteen (15) days in counties having a population of over twenty thousand (20,000) and under thirty-five thousand (35,000), according to the 1970 federal census or any subsequent federal census; and
(D) For a number of days fixed by the respective county legislative bodies, but not in excess of thirty (30) days, in counties having a population of over thirty-five thousand (35,000), according to the 1970 federal census or any subsequent federal census.
(2) The county mayor, when the county legislative body cannot act, may extend the time or may call the board in special session at any time, if in the county mayor's judgment the public welfare requires it.
(c) Any county board of equalization, having jurisdiction over a municipality with a beginning tax due date different from that of the county, shall meet as required by the county legislative body, but at least one (1) month prior to the applicable beginning tax due date.
It is declared to be the legislative intent that §§ 67-1-502 and 67-1-508 — 67-1-513 be liberally construed in favor of jurisdiction and powers conferred upon the division of property assessments and the state board of equalization; and the division and the board and each of the entities shall have and exercise all such incidental powers as may be necessary to carry out and effectuate the objectives and purposes of §§ 67-1-502 and 67-1-508 — 67-1-513, and to equalize the assessment of all property subject to taxation as provided by law.
An assessor of property shall be elected by the qualified voters of each county and shall hold office for a term of four (4) years and until the assessor's successor is elected and qualified.
(a) In cases of vacancies, the county legislative body, at its first session after the vacancy occurs shall elect an assessor who shall hold office until the September 1 following the next regular August election.
(b) The assessor shall be elected by the qualified voters at the first regular August election coming after the vacancy, and shall hold office from the following September 1 to the close of the term for which the predecessor was elected.
(c) If the office of the assessor becomes vacant due to death, resignation or removal, the duties of the assessor shall be temporarily discharged by the chief deputy, or deputy designated as temporary successor by the assessor of property in writing, until a successor assessor is elected or appointed and qualified according to law.
(a) Before entering into the duties of the office, the county assessor shall take an oath to support the constitutions of this state and of the United States, and an oath of office pursuant to § 67-1-507. Each county assessor shall enter into an official bond, payable to this state, in the sum of fifty thousand dollars ($50,000) and conditioned as required by § 8-19-111. The bond must be prepared, executed, filed, and recorded in accordance with title 8, chapter 19.
(b) Each county assessor of the state shall, on or before the January 1 following election, execute and enter into a new bond in the amounts provided by law and conditioned as directed in subsection (a), and it is unlawful after that date for any assessor to perform the duties of assessor without giving such bond. If such bond is not made by that date, that office shall become vacant and shall be filled as may be provided by law.
(1) In order to assure that each county assessor of property shall have a minimum staff to assist the county assessor in carrying out the duties and responsibilities required by law, the assessor is authorized to appoint at least one (1) deputy assessor for each four thousand five hundred (4,500) parcels of property, as determined by the division of property assessments, over and above the first four thousand five hundred (4,500) parcels of property within the assessor's taxing jurisdiction.
(2) Each deputy assessor shall have the same power, duties and liability of the assessor of property with respect to the appraisal, classification, and assessment of property.
(b)
(1) In any county where the assessor does not qualify for a deputy assessor under this section, the assessor is authorized, with the approval of the county legislative body, to employ or appoint a secretary to assist the assessor in the operation of the assessor's office. The compensation of such secretary shall be fixed by the county legislative body and paid out of county funds.
(2) The assessor shall employ such additional staff as the assessor deems necessary and establish rates of compensation for all employees within the appropriation established for the assessor's office by the county legislative body.
(c) The assessor of property shall be liable for any malfeasance, misfeasance, or nonfeasance of the assessor's deputy.
(a) Each assessor shall take and subscribe to the following oath of office, before the county mayor or other official authorized by law to administer oaths, which oath shall be attached to and filed with the bond of the assessor in the office of the county clerk, viz.:
“I, , assessor of property (or deputy assessor) of the county of , state of Tennessee, do solemnly swear (or affirm) that I will appraise, classify, and assess all taxable property of the county of , according to the Constitution of Tennessee and the laws of the state; that I will truly report all persons who fail or refuse to list their taxable property or who have to my knowledge returned a fraudulent list; and that I will faithfully, impartially and honestly discharge my duties as assessor of property according to the law, to the best of my knowledge and ability, without fear, favor or affection, so help me God.
Signed Assessor of Property
Subscribed to and sworn before me this day of , 20.”
(b) Each deputy assessor shall likewise take the oath and file the oath with the county clerk before entering upon the discharge of duties.
(a) The assessor of property of each county or metropolitan government shall receive as compensation an annual salary as established by § 8-24-102.
(b) The legislative or governing bodies of counties and metropolitan governments may from time to time fix the compensation of assessors as may, in their judgment, be necessary and proper in order to attract or retain the service of assessors of professional competence, technical skills and needed administrative abilities, any private acts, charter provisions or other legal restrictions to the contrary notwithstanding.
(c)
(1) Out of funds available to the state board of equalization or division of property assessments, the state board may provide grants to counties to fund incentive increases of compensation for those assessors and their deputies who successfully complete certain courses of study and field training, and attain certain levels of increased competence and technical skills as prescribed and provided by the state board of equalization. Grants made pursuant to this subsection (c) shall be used only as a cash salary bonus supplement to the assessor or deputy, and shall not be used to supplant existing salaries or other incentives or as substitutes for normal salary increases periodically due to assessors or their deputies.
(2) Any assessor or deputy assessor who has completed the necessary courses of study and training and has been designated by the International Association of Assessing Officers as a certified assessment evaluator shall receive additional compensation of not less than seven hundred fifty dollars ($750) per annum or ten percent (10%) of the assessor's or deputy assessor's normal annual salary otherwise provided by law, but not to exceed one thousand five hundred dollars ($1,500) per annum under rules established by the state board of equalization.
(3) Any assessor or deputy assessor who has completed the necessary courses of study and training and has been designated by the Tennessee Certified Assessor's Program as a “Tennessee Master Assessor” shall receive additional compensation of one thousand dollars ($1,000) per annum.
(4) Any assessor or deputy assessor who has completed the necessary courses of study and training and either been designated by the Tennessee Certified Assessor's Program as a Tennessee certified assessor, or has been designated by the International Association of Assessing Officers as a residential evaluation specialist shall receive additional compensation of seven hundred fifty dollars ($750) per annum.
(a) To assure that the assessment functions will be performed in a professional manner by competent assessors, meeting clearly specified professional qualifications, the state board of equalization is authorized and directed to prescribe educational and training courses to be taken by assessors and their deputies, and to specify qualification requirements for certification of anyone who is to be engaged to appraise and assess property for the purpose of taxation. Such educational and training courses shall include information on the assessment of conservation and scenic easements and other instruments that limit or restrict the use, management, alteration, demolition or transfer of property for the purpose of preserving property that is of historical, architectural, archaeological or cultural value.
(b) The state board of equalization may authorize the division of property assessments to administer this function under the control and supervision of the state board, to specify the certification requirements of persons who are to be certificated as qualified as local assessors of property, and to prescribe qualifications of those who are to be certified as qualified to act as deputy assessors.
(c) Any specifications or qualifications that shall be determined upon as a prerequisite to receiving and holding a certificate from the state board as qualified to be an assessor or a deputy assessor of property shall be approved and promulgated by the state board of equalization.
(d) It is the legislative intent that this section shall not serve to prevent any duly elected or appointed assessor of property from assuming such office or performing the assessor's legally specified duties.
(e) Notwithstanding § 4-19-101, all examinations administered by the comptroller of the treasury as part of the assessment certification and education program, including, but not limited to, the total bank of questions from which the tests are developed, the answers, and the answer sheets of individual test takers, shall be confidential and shall not be public records or state records open for public inspection pursuant to § 10-7-503.
(a) The state board of equalization has the power and the duty to prescribe the educational and training courses to be taken by assessors and their deputies, with a long-range view of gradually raising the professional standards and qualifications required, and has the power and duty to issue certificates to those it has found to be qualified to be assessors and deputy assessors on the basis of their successful completion of such educational and training courses.
(b) The state board shall issue identification cards to all assessors and their deputies. Such identification card shall identify the holder as an assessor or the assessor's deputy. Furthermore, the state board shall issue identification decals for the motor vehicles used by an assessor or the assessor's deputy. Such decal shall identify the motor vehicle as one used by an assessor or the assessor's deputy in the performance of the assessor's or deputy assessor's official duties.
The state board of equalization, subject to proper rules and regulations to be published and furnished to every assessing official, has the power to invalidate the certificate of any assessor or deputy assessor who willfully fails or refuses to perform such person's duties faithfully in accordance with the rules, regulations and instructions promulgated and issued by the state board of equalization, its manuals of assessment and the laws of the state governing the assessment of property and the duties of each assessor and deputy assessor.
The state board, out of funds available to it by appropriation, may enter into contracts with educational or professional institutions or organizations conducting schools and field training courses for all Tennessee assessors and their deputies in keeping with standards and qualifications adopted or to be adopted.
(1) As soon as practicable, and in no event later than January 1 next following completion of countywide reappraisal of property in a county, and establishment of an effective plan of updating of assessments for that county certified by the state board of equalization, all municipal and other assessment offices in that county shall be consolidated with the office of the county assessor and thereafter there shall be only one (1) assessment office in that county, and a single roll shall be furnished at the cost of reproduction for use by all taxing jurisdictions within that county.
(2) However, any municipality that lies within the boundaries of two (2) or more counties may maintain an assessment office separate from the assessment offices of the counties in which such municipality lies, or may contract with the state board of equalization for assessment services for the municipality pursuant to § 67-1-307.
(b)
(1) Upon the consolidation of all municipal and other assessment offices within any county with the office of the county assessor of property, all local boards of equalization shall be consolidated with the county board of equalization, and thereafter there shall be only one (1) local board of equalization in the county.
(2) However, if any municipality lying within the boundaries of two (2) or more counties maintains an assessment office separate from the assessment offices of the county in which such municipality lies, or if such municipality contracts with the state board of equalization for the provision of assessment services under § 67-1-307, such municipality shall have a city board of equalization separate from the local boards of equalization of such counties.
Whenever the county legislative body has inaugurated, set up or approved any system of keeping records in the office of the assessor of property of such county, when such system has been approved by the comptroller of the treasury, such system may not be changed, altered, or abolished without approval of the comptroller of the treasury.
To qualify for the office of assessor of property, a person must be a qualified voter of the county and a resident of the county for one (1) year prior to the date of the qualifying deadline for running as a candidate for assessor of property.
A county legislative body may impose taxes for county purposes, and fix the rate of taxation, at its first session every year; and, if the legislative body omits such duty at the first session, it shall perform it at any subsequent quarterly session.
A county legislative body shall not levy any higher pro rata of taxes on any species of property or privilege than that fixed for the state, but the percentage of such levy, as compared with the state tax, shall be equal and uniform.
(a) All counties that levy and collect taxes for special purposes or to pay off any bonded indebtedness are empowered, through the county legislative bodies, to appropriate and use the funds levied and collected for such purposes to discharge any outstanding bonded indebtedness of the counties.
(b) Such counties have the authority, through the county legislative bodies, to place all the funds levied and collected for special purposes in one (1) fund, to be known as the special fund of the counties, and to appropriate and use the money for the purpose of discharging any bonded indebtedness of the counties.
(a) All taxes, state, county, and municipal, to be collected under this part, parts 10, 15 and 16 of this chapter, and chapter 5, parts 18-20 of this title shall be payable the first Monday in October in each year, except taxes of municipal corporations that, under existing laws, are authorized to collect their own taxes on property and privileges; provided, that, whenever, under any plan or program of consolidation of governmental functions of county offices with comparable facilities provided under any municipal charter, it is expedient to fix different due dates than those established in this subsection (a), in order to avoid the destruction of existing municipal fiscal policies, the county trustee of any county, by and with the consent of a majority of the members of the county legislative body of the county, may establish due dates other than those set forth in this subsection (a).
(b) County revenue shall be collected by the officers at the time and in the manner prescribed for the collection of the state revenue.
(c) All municipal taxes collectible by the county trustee shall become due and delinquent at the same time as state and county taxes; provided, that, whenever, under any plan or program of consolidation of governmental functions of county offices with comparable facilities provided under any municipal charter, it is expedient to fix different due dates than those established in subsection (a), in order to avoid the destruction of existing municipal fiscal policies, the county trustee of any county, by and with the consent of a majority of the members of the county legislative body of the county trustee's county, may establish due dates other than those set forth in subsection (a).
(a) Every taxpayer shall pay state, county, municipal, highway, school and all of such taxpayer's property taxes to the county trustee, except when otherwise provided by law, and such taxes shall be due and payable on the first Monday in October of each year.
(b) Notwithstanding any law to the contrary, upon adoption of a resolution by the county legislative body, the county trustee may accept property taxes at any time after July 10, prior to the first Monday in October established by § 67-1-701, on which date trustees are required to accept property tax payments, and after the tax rates are finally set, the trustee's tax rolls are received and the trustee's receipts are prepared. County trustees may begin accepting tax relief applications on the same date on which the trustee accepts property tax payments.
(1) The commissioner of revenue is empowered to accept, in payment of all taxes collected by the department, evidence satisfactory to the commissioner that the amount due for the tax has been deposited in a state depository designated pursuant to § 9-4-107, which has been approved by the state treasurer, to the credit of the state of Tennessee.
(2) Evidence of the deposit must be furnished to the commissioner on or before the due date of the tax as established by law, and no taxpayer paying taxes in such manner shall be relieved of any penalty for delinquency upon failure of such evidence to be seasonably furnished, except as provided in § 67-1-803.
(b) The commissioner may require that any person owing ten thousand dollars ($10,000) or more in connection with any return, report or other document to be filed with the department, or owing one thousand dollars ($1,000) or more in connection with any return, report or other document to be filed with the department under chapter 6 of this title or chapter 4, part 7 of this title, or owing two thousand five hundred dollars ($2,500) or more in connection with any quarterly estimated payment due under § 67-4-2015(b), shall pay any such tax liability to the state no later than the date the payment is required by law to be made in funds that are immediately available to the state on the date of payment. Payment in immediately available funds may be made by wire transfers of funds through the federal reserve system or by any other means established by the commissioner, with the approval of the state treasurer, that ensures the availability of such funds to the state on the date of payment. Evidence of such payment shall be furnished to the commissioner on or before the due date of the tax as established by law. Failure to timely make such payment in immediately available funds, or failure to provide such evidence of payment in a timely manner, shall subject the taxpayer to penalty and interest as provided by law for delinquent or deficient tax payments. If payment is timely made in other than immediately available funds, penalty and interest shall be added to the amount of tax due from the due date of the tax payment to the date that funds from the tax payment become available to the state.
(c) The commissioner is specifically authorized to establish, by rule, periodic filing and payment dates that are subsequent to the dates otherwise established by law for any taxes collected by the department in those instances where the commissioner deems it to be in the best interest of the state to do so. Such alternative date shall not, however, be later than the last day of the month in which the tax was otherwise due.
(d) The commissioner, in the commissioner's discretion, may require taxpayers who are required to electronically transfer any payment of twenty thousand dollars ($20,000) or more to the department of revenue to also electronically file the return, report or other document with which such electronically transferred payment is associated or on which credit for the payment electronically transferred is taken. In extenuating circumstances, the commissioner has discretionary authority to waive this requirement with respect to any taxpayer. To obtain a waiver, the taxpayer shall demonstrate in writing to the department that such circumstances exist. Any return or tax information, as defined by § 67-1-1701, electronically transferred under this subsection (d) shall constitute confidential information, the disclosure of which shall be subject to part 17 of this chapter.
(e) The commissioner is authorized to prescribe all rules necessary for the administration of this section.
(f)
(1) The commissioner is authorized, but not required, to accept credit cards, debit cards, or other similar financial transaction cards in payment of all taxes or other amounts collected by the department. The commissioner may adopt reasonable policies and rules governing the manner of acceptance of such cards.
(2) The commissioner may enter into appropriate agreements with card issuers or other appropriate parties as needed to facilitate the acceptance of payments authorized by this subsection (f). The commissioner may impose a surcharge or convenience fee upon persons making payment by credit card, debit card, or other similar financial transaction cards to wholly or partially offset, in the aggregate, any discount or administrative fees charged to the department on such payments.
(3) The commissioner also may enter into appropriate agreements with third-party service providers for the acceptance and processing of credit card, debit card, or other similar financial transaction card payments on the commissioner's behalf. Such agreements may authorize the third-party service provider to impose a surcharge or convenience fee upon persons making such payments.
(4) When a person elects to make a payment to the department by credit card, debit card, or other similar financial transaction card and a surcharge or convenience fee is imposed as authorized by this subsection (f), the payment of the surcharge or convenience fee shall be deemed voluntary and shall not be refundable. No person making any payment to the department by credit card, debit card, or other similar financial transaction card shall be relieved from liability for the underlying obligation, except to the extent that the department realizes final payment of the underlying obligation in cash or the equivalent. If final payment is not made by the card issuer or other guarantor of payment, then the underlying obligation shall survive and the department shall retain all remedies for enforcement that would have applied if the transaction had not occurred.
(a) The trustee shall receive, in discharge of public taxes and other dues to the state, besides the constitutional and lawful currency of the United States:
(1) Warrants on the state treasury legally outstanding in the hands of each person to whom issued and unpaid;
(2) Coins of the United States;
(3) United States legal tender notes;
(4) Federal reserve notes; and
(5) In those counties having a population, according to the 1990 federal census or any subsequent federal census, of not less than thirty-four thousand eight hundred fifty (34,850) nor more than thirty-five thousand (35,000), payment by credit card or debit card.
(b)
(1) The trustee shall provide to each taxpayer a receipt printed or written in ink or indelible pencil, for all the taxes paid by the taxpayer.
(2) If a portion of the tax notice is to be retained by the taxpayer, in lieu of the trustee mailing a separate receipt of the payment to the taxpayer, the tax notice shall:
(A) Clearly state such fact; and
(B) Inform the taxpayer that, if the taxpayer desires the trustee to mail a separate receipt of the payment to the taxpayer, the taxpayer must include a self-addressed, stamped envelope when the taxes are paid.
(3) If the trustee provides a separate receipt of all taxes paid by the taxpayer, such receipt shall be numbered and dated.
(c)
(1) The trustee, on the payment of all state and county taxes, shall issue to the taxpayers a receipt showing the aggregate of state taxes and the aggregate of county taxes paid by the taxpayers, and each amount so separated and distinguished from the other amount in the receipt that the taxpayer may know, on reading the receipt, the taxes paid to the state and the taxes paid to the county. All tax receipts shall be so printed that, on the margin of the receipt at one (1) end, shall appear the separate levies composing the county rate and the purposes for which levied, and on the margin of the other end shall appear the separate levies composing the state rate and all purposes for which levied; provided, that, where it is impracticable literally to comply with the specific provisions of this subdivision (c)(1) with respect to the separation of state and county taxes, for any cause appearing to the commissioner of revenue, the commissioner is authorized to order such different arrangement of the tax receipt as will substantially comply with the requirements for the separation of the state and county taxes on the receipt.
(2) In counties where the tax assessing and tax collecting authorities use mechanical devices for the printing of assessments and tax receipts, the trustee may omit from such receipts the listing of the several levies composing the county rate and the purposes for which levied and statements with regard to any state levies; provided, that any taxpayer requesting such statement with regard to the levies shall be furnished a statement by the trustee.
(d) It is the duty of the county legislative body of each county to furnish the county trustee of the county with a sufficient number of tax receipts printed in duplicate and in a blank form in a book or books numbered from one (1) up, consecutively, and shall have the year for which the taxes are due printed in large figures, not less than one inch (1″) deep, on the face of each receipt. The trustee shall be charged with these receipts, and must, in the trustee's final settlement, account for each blank receipt so received by the trustee. No payment to the trustee of any tax shall be legal and binding unless paid upon the regular tax receipt specified in this subsection (d), and duplicate receipts shall be preserved in the book or books, to be submitted to the county legislative body by the trustee whenever required to do so. The receipt book of duplicates, when filled, shall be filed in the office of the county clerk for reference, and shall be receipted for by the clerk and carefully preserved in the clerk's office as a record for the protection of taxpayers who have paid their taxes and lost or misplaced their receipts.
(e) Any trustee that properly collects state and county taxes by credit or debit card is authorized to collect a fee for processing any payment by credit or debit card; provided, that the fee shall not exceed the amount that the card issuer charges the trustee in connection with honoring the credit or debit card payment.
(f) As used in this section, unless the context otherwise requires:
(1) “Credit card” has the same meaning as set forth in § 39-14-102;
(2) “Debit card” has the same meaning as set forth in § 39-14-102; and
(3) “Issuer” has the same meaning as set forth in § 39-14-102.
(g) If a payment by credit or debit card is not honored by the issuer, the trustee may collect a service charge from the person who owes the public taxes. The service charge is in addition to the public taxes for which the credit or debit card was used and the original processing fee. The amount of the service charge shall be the same amount as the fee charged by the trustee for the collection of a check drawn on an account with insufficient funds.
No clerk, or other officer, shall make any charge for any statement, certificate, or receipt for taxes, except as provided in § 67-5-2007. Nothing in this section shall be construed to limit the ability of the trustee to request the taxpayer to include a self-addressed, stamped envelope if the taxpayer desires the trustee to mail a separate receipt of the payment of taxes to the taxpayer pursuant to § 67-1-704(b)(2)(B).
It is a Class C misdemeanor for a collector of taxes to collect, under the color or pretense of office, more money, in the name of taxes, than is directed by law.
(a) The county clerks of the various counties are also authorized and empowered to settle and adjust with taxpayers all errors and double assessments of county taxes erroneously or illegally collected by them and to direct the refunding of the taxes. Any claim for such refund by the county of taxes or revenue alleged to have been erroneously or illegally paid shall be filed with the county clerk, supported by proper proof within one (1) year from the date of payment; otherwise, the taxpayer shall not be entitled to a refund and the claim for refund shall be barred.
(b) Subsection (a) also applies to municipalities and municipal taxpayers; provided, however, that in the case of claims made for refund of municipal taxes, the duties, obligations, and responsibilities of the county clerk described in subsection (a) shall be performed by the city recorder, city clerk, or director of finance of the municipality acting under the direction and authority of the mayor or city manager.
The commissioner may waive enforcement and collection of any tax imposed under any revenue laws administered by the commissioner, in any case of deficiency, if:
(1) The amount of such deficiency is the lesser of ten dollars ($10.00) or ten percent (10%) of the total tax due;
(2) The commissioner determines that the cost to the department to collect such deficiency would be equal to or greater than the tax collected; and
(3) The commissioner determines that the deficiency does not result from fraud or an intention to avoid payment.
(A) When any person liable to pay any tax that is collected or administered by the commissioner of revenue fails to pay the tax, or any portion of the tax, on or before the date when such tax shall be required to be paid, interest shall be added to the amount of tax due, in addition to any penalty provided by law, at a rate to be determined by the commissioner in the manner provided in this subsection (a).
(B) The rate of interest determined by the commissioner shall be the formula rate of interest last published in the Tennessee Administrative Register, pursuant to title 47, chapter 14.
(C) The commissioner shall determine the rate of interest by causing notice of such rate to be filed with the secretary of state on July 1 each year, for publication in the Tennessee Administrative Register.
(D) The rate of interest determined by the commissioner shall become effective on July 1 of each year, and shall apply to all assessments of interest on and after July 1 of each year, until July 1 of the following year when the rate of interest shall be redetermined by the commissioner.
(E) The determination of the commissioner of the rate of interest on delinquent and deficient tax payments and the filing of notice thereof, as provided for in this chapter shall not constitute a rule under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
(2) All delinquent or deficient payments of taxes, either administered or collected by the commissioner, shall accrue interest from the date delinquent or deficient until paid. For periods prior to the date of final assessment, interest shall accrue at the prevailing rate in effect on the date of the final assessment, regardless of the taxable period involved. For periods subsequent to the date of final assessment, interest shall accrue at the prevailing rate in effect on the date of the accrual of such interest.
(3) Any interest imposed on delinquent or deficient tax payments shall be considered part of such delinquent or deficient taxes and shall be payable to and collectible by the commissioner in the same manner as the tax is paid and collected.
(4)
(A) In any case where the commissioner, in the commissioner's discretion, agrees to permit a taxpayer to pay a tax liability to the department in installments over an extended period, the interest payable on the liability shall be computed at the time the taxpayer executes an agreement to do so.
(B) The interest shall be computed at a rate not to exceed the highest rate allowable by law in Tennessee on short-term business loans and upon the basis of the total tax, penalty and interest owed by the taxpayer at the time the agreement is made.
(C) If the taxpayer makes all of the monthly installment payments on a timely basis, no additional interest shall be computed on the liability covered by the agreement.
(D) If an installment payment is delinquent, additional interest shall be computed on the delinquency at the stated rate, and penalty shall be computed only if allowed by any other law.
(E) Any change in the interest rate shall be effective only after a notice of the change has been filed with the secretary of state. This notice shall not constitute a rule under the Uniform Administrative Procedures Act.
(5) Tax returns filed prior to the due date shall be deemed to be filed on the due date, rather than on the date actually filed.
(6) Notwithstanding this section or any law to the contrary, no interest shall be imposed on delinquent or deficient payments of litigation taxes to be collected by the clerk of the appellate courts.
(b)
(1)
(A) When it is determined by administrative review that a person is entitled to a refund or credit of any tax collected or administered by the commissioner, and such person is not a debtor as defined in § 67-1-1808, interest shall be added to the amount of refund or credit due, beginning forty-five (45) days from the date the commissioner receives proper proof to verify that the refund or credit is due and payable. In the case of a taxpayer who is a debtor as defined in § 67-1-1808, when it is determined by administrative review that such taxpayer is entitled to a refund or credit of any tax collected or administered by the commissioner, interest shall be added to the amount of refund or credit due, beginning ninety (90) days from the date the commissioner receives proper proof to verify that the refund or credit is due and payable.
(B) Notwithstanding subdivision (b)(1)(A), interest must not be added to any refund paid pursuant to § 67-4-2122 until ninety (90) days from the date the commissioner receives the refund claim and proper proof to verify that the refund or credit is due and payable.
(2) When it is determined by court order that a person is entitled to a refund or credit of any tax collected or administered by the commissioner, interest shall be added to the amount of refund or credit due, beginning:
(A) Forty-five (45) days from the date of filing a claim for refund, pursuant to § 67-1-1802(a);
(B) Forty-five (45) days from the date of waiver by the commissioner, pursuant to § 67-1-1802(c)(3);
(C) On the date of payment, in the case of any tax collected after suit was filed under § 67-1-1801; or
(D) Ninety (90) days from the date of filing a claim for refund in the case of a taxpayer who is a debtor as defined in § 67-1-1808.
(3)
(A) The rate of interest to be paid pursuant to this subsection (b) shall be determined as provided in subsection (a).
(B) Notwithstanding subdivision (b)(3)(A), the rate of interest is the rate established by 26 U.S.C. § 6621(a)(1) for a large corporate overpayment in the amount of the federal short-term rate plus five-tenths (0.5) of a percentage point for any refund issued based on the allegation that the franchise tax in chapter 4, part 21, of this title or any provision of chapter 4, part 21, is unconstitutional by failing the internal consistency test.
(4) Except for taxes collected after suit is filed under § 67-1-1801, no interest shall be added to any refund made, or credit given, by the commissioner for which no claim for refund or application for credit is made by the taxpayer, pursuant to § 67-1-1802(a), or for which the requirement that the taxpayer file a claim for refund is waived by the commissioner, pursuant to § 67-1-1802(c)(3).
(c) Notwithstanding this section, interest added to highway user fuel tax due or interest added to refunds of such taxes shall be computed in accordance with [former] § 67-3-710 [repealed].
The commissioner is authorized to abate, in whole or in part, any statutory penalty imposed under any revenue laws administered by the commissioner in any case of deficiency tax collection made by the department in connection with an audit conducted by it, if the commissioner determines that the payment by a taxpayer of a tax in an amount less than that due under the applicable laws and rules and regulations relates to a taxable period covered by a timely filed return and is not the result of:
(1) Negligence or intentional disregard of the tax law or rules and regulations; or
(1) The commissioner is authorized to waive, in whole or in part, any statutory penalty imposed under any revenue laws administered by the commissioner in any case of deficiency or delinquency tax collection made by the department, if the commissioner determines that the payment by a taxpayer of a tax in an amount less than that due under the applicable laws and regulations, or that the failure of a taxpayer to pay any tax by the due date is the result of one (1) or more of the good and reasonable causes enumerated in subsection (c) and is not a result of gross negligence or willful disregard of the law.
(2) Under no circumstances, however, shall this authority be deemed to extend to any interest payable under the law in connection with any case of tax deficiency or delinquency.
(3) The commissioner shall prescribe and publish rules and regulations governing the manner in which applications for a waiver of penalty shall be accepted and processed.
(b) Initial receipt, review and recommendation for approval or disapproval of each application for waiver of penalty, as authorized in subsection (a), shall be made by the director, or the director's delegate, of the division or agency within the department charged by the commissioner with the enforcement of the tax involved. The commissioner or the commissioner's delegate shall thereafter review and approve or disapprove each application for waiver of penalty, as the commissioner or the commissioner's delegate may deem proper, and such determination by the commissioner or the commissioner's delegate shall constitute the determinative and final decision on the application.
(c)
(1) In the case of a tax deficiency, that is constituted by a failure to pay the full amount of tax due under the law, the following specific causes, if clearly established by the taxpayer, shall be acceptable as good and reasonable cause for the waiver of penalty:
(A) The taxpayer incurred the deficiency as a result of having been misled by erroneous advice or action, that was not clearly in contravention of the law, on the part of officials charged with the enforcement of this state's tax statutes;
(B) The taxpayer incurred the deficiency as a result of legal misadvice that was not clearly in contravention of the law, from an ostensibly competent and financially independent lawyer or accountant;
(C) The provisions of the pertinent law or regulation were, at the time the deficiency was incurred, unsettled, unclear, and misleading to a reasonable person; and the taxpayer acted in good faith on a reasonable, though mistaken, application of such law or regulation, with the result that the tax deficiency in question was incurred;
(D) The deficiency resulted from reliance by the taxpayer upon factual, but not legal, misrepresentations made by persons with whom the taxpayer dealt in the course of the taxpayer's business, other than the taxpayer's own agents or employees, the taxpayer having no reason to doubt or question such misrepresentations; or
(E) The deficiency resulted from a mistake of fact on the part of the taxpayer, who thereafter voluntarily and without any kind of demand upon the part of the officials charged with the enforcement of the law, tenders the amount of the deficiency, plus accrued interest.
(2) If the cause for the deficiency does not comport with any of the causes provided for in subdivision (c)(1), a determination may be made, nevertheless, as to whether the statement of facts submitted by the taxpayer, or known to the commissioner, establishes a good and reasonable cause. Any cause for a deficiency may be accepted as a good and reasonable cause that appears to the commissioner to justify a conclusion by the commissioner that the taxpayer has done everything the taxpayer could reasonably be expected to do as an ordinarily intelligent and reasonably prudent business person and that clearly negates either a willful disregard of the law or gross negligence.
(d)
(1) In the case of a tax delinquency of not more than thirty (30) days, which is constituted by a failure to file a return and pay the tax within not more than thirty (30) days after the time prescribed by law, the following specific causes, if clearly established by the taxpayer, shall be acceptable as good and reasonable cause for the waiver of penalty:
(A) Return was timely mailed, but for reasons either known or unknown was not timely received or not received at all, and the taxpayer satisfactorily explains noncompliance within § 67-1-107;
(B) Delinquency was due to erroneous information given the taxpayer by an official charged with the enforcement of this state's tax statutes;
(C) Delinquency was attributable to an intervening providential cause, such as, but not limited to, the occurrence of a disabling injury, illness, or death of the taxpayer, or a member of the taxpayer's immediate family, or of a person upon whom the taxpayer has heretofore exclusively relied for the preparation of the taxpayer's returns, and such intervening cause occurred prior to the date on which the required return and payment would otherwise be deemed delinquent;
(D) Delinquency was caused by unavoidable absence of the taxpayer or a person upon whom the taxpayer has heretofore exclusively relied for the preparation of the taxpayer's returns;
(E) Delinquency was caused by the destruction by fire or other casualty of the taxpayer's place of business or business records;
(F) The taxpayer proves that the taxpayer made timely application to the department for the proper tax forms, and these were not furnished the taxpayer in sufficient time to permit the executed return to be filed on or before the due date;
(G) The taxpayer proves that the taxpayer personally visited an office of the department before the expiration of the time within which to file the required return for the purpose of securing information or aid to properly make out the taxpayer's return and, through no fault of the taxpayer, was unable to secure such information or aid;
(H) Delinquency was a result of the taxpayer's failure to enclose a negotiable instrument, as defined by the Uniform Commercial Code, compiled in title 47, with the taxpayer's timely filed return, and the taxpayer promptly responds to a request for payment upon notification thereof, and satisfactorily demonstrates such failure was due to an inadvertent oversight or error; or
(I) Delinquency becomes apparent when the taxpayer voluntarily pays the tax but, for any legal reason, the department would be unable to enforce collection, such as the collection would be barred by the statute of limitations, the lack of jurisdiction or other similar reason.
(2) If the cause for the delinquency does not comport with any of the causes provided for in subdivision (d)(1), or if the delinquency is of more than thirty (30) days' duration, a determination may be made, nevertheless, as to whether the statement of facts submitted by the taxpayer, or known to the commissioner, establishes a good and reasonable cause. Any cause for a delinquency may be accepted as a good and reasonable cause that appears to the commissioner to justify a conclusion by the commissioner that the taxpayer has done everything the taxpayer could reasonably be expected to do as an ordinarily intelligent and reasonably prudent business person, and that clearly negates either a willful disregard of the law or gross negligence.
(3) Notwithstanding subdivisions (d)(1) and (2), the commissioner may accept as good and reasonable cause for waiver of a delinquency penalty the fact that the taxpayer has timely filed and paid such tax for a period of at least two (2) years next preceding the due date of the delinquent return and payment, if the specific cause for the delinquency does not constitute a willful disregard of the law or gross negligence. If the taxpayer has filed estimated payments of franchise and excise taxes by the due date as required by § 67-4-2015 for a period of at least two (2) years, but the estimated payments resulted in an underpayment for which penalties and interest accrued, the commissioner may consider such estimated payments to be filed in a timely manner for purposes of establishing good and reasonable cause under this subdivision (d)(3).
(e)
(1) There shall be no judicial review of the commissioner's action upon applications for waiver of penalty as authorized in subsection (a) otherwise than as provided in part 9 of this chapter.
(2) The commissioner's action upon all applications for waiver of penalty made under this section shall be deemed final.
(3) Prior determinations of the attorney general and reporter as to what constitutes good and reasonable cause for a deficiency shall serve as a guide and standard of reference for future decisions whenever those determinations may be applicable to the specific cause established.
(4)
(A) The commissioner is authorized, in the commissioner's discretion, to designate subordinate officials in the department to waive, on the commissioner's behalf, penalties in amounts of five thousand dollars ($5,000) or less.
(B) The commissioner is authorized, in the commissioner's discretion, to waive penalties in amounts of fifteen thousand dollars ($15,000) or less.
(C) The commissioner is authorized, in the commissioner's discretion, to waive penalties in amounts of more than fifteen thousand dollars ($15,000); provided, that the attorney general and reporter may require that such waivers or any class of such waivers be subject to the attorney general and reporter's prior review and approval.
(1) When any person fails to timely make any return or report or fails to timely pay any taxes shown to be due on the return or report, there shall be imposed against that person a penalty in the amount of five percent (5%) of the unpaid tax amount for each thirty (30) days or fraction thereof that the tax remains unpaid subsequent to the delinquency date, up to a maximum of twenty-five percent (25%) of the unpaid amount. Where a return or report is delinquent, the minimum penalty shall be fifteen dollars ($15.00), regardless of the amount of tax due or whether there is any tax due.
(2) A return, report, or payment shall be considered untimely if not made on or before the delinquency date under the applicable statutes, including any extensions of time granted. In the case of an untimely return, report, or payment, the penalty shall be calculated as of the original delinquency date, without reference to any extensions granted.
(3) In the case of quarterly tax payments made pursuant to § 67-4-308, the penalty shall be calculated as provided by that section.
(4) In the case of quarterly estimated tax payments made pursuant to § 67-4-2015, the penalty shall be calculated as provided by that section.
(5) In the case of an extension of time granted under § 67-4-2015, the penalty shall be calculated as provided by that section.
(b)
(1) When any person fails to report and pay the total amount of taxes determined to be due by the commissioner, if such failure is determined by the commissioner to be due to negligence, there shall be imposed a penalty in the amount of ten percent (10%) of the underpayment.
(2) When any person, upon the initial filing of the person’s franchise and excise tax return, fails to comply with the requirements described in § 67-4-2006(d) or (e) and such failure is determined by the commissioner to be due to negligence, there shall be imposed a penalty equal to the greater of ten thousand dollars ($10,000) or fifty percent (50%) of any adjustment to the initially filed return made under § 67-4-2006(b)(1)(K) or (e). The commissioner is authorized to waive the penalty, in whole or in part, for good and reasonable cause under § 67-1-803. Any penalty imposed under this subdivision (b)(2) shall be disregarded for purposes of determining the taxpayer’s filing record under subdivision (d)(3).
(3) When any person fails to pay the tax required by § 67-4-2007(f), if such failure is determined by the commissioner to be due to negligence, there shall be imposed a penalty in the amount of fifty percent (50%) of the underpayment.
(4) For the purpose of this section, “negligence” includes, but is not limited to, any failure to make a reasonable attempt to comply with any law relating to any tax collected or administered by the commissioner.
(5) A determination by the commissioner that a taxpayer has been negligent shall be deemed presumptively correct. Such determination may be rebutted only if the taxpayer makes a showing of due care. For purposes of this subdivision (b)(5), “due care” means that care that an ordinarily prudent business person would have exercised under the circumstances.
(6) This penalty is in addition to all other penalties provided by law, except as provided in subsection (c).
(c)
(1) When any person fails to report and pay the total amount of taxes determined to be due by the commissioner, if such failure is determined by the commissioner to be due to fraud, there shall be imposed against the taxpayer a penalty in the amount of one hundred percent (100%) of the underpayment.
(2) For the purpose of this subsection (c), “fraud” includes any deceitful practice or willful device resorted to with intent to evade the tax.
(3) A failure to pay the tax by one who charges or passes on the tax to others constitutes a presumption of fraud. Such presumption may be rebutted only if the taxpayer makes an affirmative showing of intent to pay the tax and comply with all other requirements of the taxing statute.
(4) Imposition of this penalty shall be in lieu of all other penalties imposed by the commissioner, except those provided in subsection (d) and part 14 of this chapter.
(d)
(1) If any check, money order, or electronic funds transfer in payment of any amount receivable under any law administered by the commissioner is dishonored, there shall be imposed a penalty upon the taxpayer in an amount equal to one percent (1%) of the amount of such check, money order, or electronic funds transfer; provided, that the penalty imposed shall be in an amount equal to ten percent (10%) of the amount of such check, money order, or electronic funds transfer for each dishonored check, money order, or electronic funds transfer in excess of two (2) issued by any one (1) person within one (1) calendar year. The minimum amount of the penalty imposed under this subdivision (d)(1) shall be fifteen dollars ($15.00). This subdivision (d)(1) does not apply if the person tendered such check, money order, or electronic funds transfer in good faith and with reasonable cause to believe that it would be duly paid.
(2) This penalty shall be in addition to all other penalties provided by law.
(e) For all purposes, the penalties imposed by any law administered by the commissioner shall be considered a part of the tax imposed.
(f) In no event shall judicial review of the commissioner's imposition of any penalty be other than as provided in part 18 of this chapter.
(g) This section shall apply to all taxes administered or collected by the commissioner, except that subsection (a) shall not apply to the tax imposed in § 67-4-409(b).
(h) Notwithstanding this section, the penalty added to delinquent highway user fuel tax due shall be computed in accordance with § 67-3-1208.
(i) Subdivision (a)(1) shall not apply to litigation taxes to be collected by the clerk of the appellate courts.
(a) In all cases where not otherwise provided in which an officer, charged by law with the collection of revenue due the state, shall institute any proceeding, or take any steps for the collection of the sum alleged or claimed to be due by the officer from any citizen, the person against whom the proceeding or step is taken shall, if that person conceives the same to be unjust or illegal, or against any statute or clause of the constitution of the state, pay the revenue under protest.
(b) This section shall not apply to any tax collected or administered by the commissioner of revenue when such tax is paid on or after January 1, 1986. Notwithstanding any other law to the contrary, it is the intent of the general assembly that it shall not be a condition precedent to any claim or suit for recovery of any taxes collected or administered by the commissioner when such taxes were paid on or after January 1, 1986, that the taxes were paid under protest, involuntarily, or under duress.
Upon the person's making such payment, the officer or collector shall pay such revenue into the state treasury, giving notice at the time of payment to the commissioner of revenue that the payment was paid under protest.
(a) The person paying the revenue may, at any time within six (6) months after making the payment, but not thereafter, sue the officer who collected the sum, for the recovery thereof.
(b) This section shall not apply after January 1, 1986, to any tax collected or administered by the commissioner of revenue.
(a) The suit may be tried in any court in the county of the taxpayer's residence or in the county of the location of the defendant having jurisdiction of the amount and parties, and if it be determined that the tax was wrongfully collected as not being due from the party to the state, for any reason going to the merits of the tax, then the court trying the case may certify of record that the tax was wrongfully paid and ought to be refunded, together with such interest as the court may determine to be proper, not exceeding the legal rate, and thereupon the commissioner of finance and administration shall issue a warrant for the refund, which shall be paid in preference to other claims on the state treasury.
(b) For the purpose of suits brought under this chapter, the commissioner of revenue shall be considered a resident of each of the several counties of the state.
(c) This section shall not apply after January 1, 1986, to any tax collected or administered by the commissioner of revenue.
(d) Notwithstanding any other provisions of this section, suits to recover ad valorem taxes wrongfully collected by a city or county must be tried in the county wherein the taxes are collected.
(a) In all such cases, if the court shall certify of record in the cause that it appears from the evidence before the court that the officer against whom the suit is brought has acted in good faith and has defended the suit with proper diligence and care, the necessary cost of the cause shall be taxed as provided by law in criminal cases, and be paid by the state.
(b) This section shall not apply after January 1, 1986, to any tax collected or administered by the commissioner of revenue.
(a) There shall be no other remedy in any case of the collection of revenue, or attempt to collect revenue illegally, or attempt to collect revenue in funds only receivable by the officer under the law, the same being other or different funds than such as the taxpayer may tender, or claim the right to pay, than that provided by this part.
(b) Subsection (a) shall not apply after January 1, 1986, to any tax collected or administered by the commissioner of revenue.
(a) No writ for the prevention of the collection of any revenue claimed, or to hinder and delay the collection of revenue, shall by either injunction, supersedeas, prohibition, or any other writ or process whatsoever; but in all cases in which, for any reason, any person shall claim that the tax so collected was wrongfully or illegally collected, the remedy for the party shall be as provided in § 67-1-908, and in no other manner.
(b) This section shall not apply after January 1, 1986, to any tax collected or administered by the commissioner of revenue.
Nothing in this part shall be construed to subject any officer of the state to any suit for a refusal on the officer's part to accept, in payment of revenue of the state, any kind or description of funds or securities or papers other than such as the officer may be authorized and required to receive for the time being by law.
(a) Sections 67-1-901 — 67-1-905 and 67-1-908 — 67-1-910 apply to the recovery of all taxes collected by any of the municipalities of this state.
(b) In order to carry out the legislative intent that all of such sections, which now apply to the recovery of state taxes erroneously paid, be conformed to apply also to the recovery of taxes erroneously paid to municipalities, the following provisions are added:
(1) The municipal officer collecting any municipal taxes paid under protest shall pay such revenue into the municipal treasury and, at the time of payment, shall give notice to the mayor and board of commissioners or other governing body of such municipality that the taxes were paid under protest;
(2) If it be finally determined by any court having jurisdiction of any suit brought within thirty (30) days after such payment under protest against the municipality to recover such taxes that the taxes were wrongfully collected as not being due from the party to the municipality, the municipality shall refund such taxes with such interest as the court may determine to be proper, not exceeding the legal rate, and shall pay the costs of the cause; and
(3) The city attorney or other legal officer of such municipality shall conduct the defense of such suit.
(a) Sections 67-1-901 — 67-1-905 and 67-1-908 — 67-1-910 apply to the recovery of all taxes collected by any of the counties of this state.
(b)
(1) The county officer collecting any county taxes paid under protest shall pay such revenue into the county treasury and, at the time of payment, shall give notice to the county mayor and board of commissioners, or other governing body of a county, that the same were paid under protest.
(2) If it be finally determined by any court having jurisdiction of any suit brought within six (6) months after such payment under protest against the county to recover such taxes that the same were wrongfully collected, as not being due from a party to the county, the county shall refund such taxes with such interest as the court may determine to be proper, not exceeding the legal rate, and shall pay the costs of the cause.
(a) As used in this part, unless the context otherwise requires:
(1) “Back assessment” means the assessment of property, including land or improvements not identified or included in the valuation of the property, that has been omitted from or totally escaped taxation; and
(2) “Reassessment” means the assessment of property that has been assessed at less than its actual cash value by reason of connivance, fraud, deception, misrepresentation, misstatement, or omission of the property owner or the owner's agent.
(b) This section shall not be construed to affect in any manner the operation of § 67-1-1004, relative to the protection of a bona fide purchaser.
(a) Any property or properties included in this part or chapter 5 of this title shall be back assessed or reassessed for the period provided by law, viz.:
(1) When the property or properties have been omitted from or escaped taxation;
(2) When the property or properties have been assessed by the assessor or computed by the board of equalization at less than actual cash value by reason of any fraud, deception, misrepresentation, misstatement, or omission of full statements of the owner of the property or the owner's agent or attorney; or
(3) When the owner of the property connives at or fraudulently procures or induces an assessment to be made by the assessor or computed by the board of equalization at less than its actual cash value; provided, that in all cases where there is a grossly inadequate assessment, fraud shall be presumed.
(b) In all cases where any taxes or assessments may be set aside or declared void by any court by reason of any irregularity or neglect to comply with the law in the proceedings; by reason of the illegality of the act constituting the power or authority to assess and levy such taxes or assessments; for want of authority in the board or authority acting in lieu of the county legislative bodies or the duly authorized and legally constituted authorities of the state, for state and county purposes; and such other purposes as may be authorized by law, and the taxes still remain unpaid, the county legislative body of any county, whenever such taxes or assessments have been made or attempted to be made, shall have the power to reassess back taxes upon any lot or parcel of lots or parcels of land subject to or chargeable with taxes for state and county purposes, and relevy the lots or parcels, and the reassessment and levies for such purposes shall be and remain liens upon the lots or parcels of land, with interest from the date when the taxes were properly leviable and assessable where such original assessments remain due and unpaid.
(a) Any municipality that lies within the boundaries of two (2) or more counties and maintains an assessment office separate from the assessment offices of the counties in which the municipality lies may make back assessments and reassessments upon property located within the municipality and subject to municipal taxation through the offices of the municipal assessor in the manner otherwise provided in this part.
(b) A property owner whose property has been assessed under subsection (a) and who disputes the assessment, or who claims exemption from the tax, may appeal the assessment to the municipal board of equalization within thirty (30) days of receipt of notice of the assessment. The municipal board of equalization shall hear the appeal within fifteen (15) days and issue a written decision within five (5) days of the hearing. If the board does not issue a decision within five (5) days of the hearing, the appeal may be taken to the state board of equalization. A decision of the municipal board of equalization may be appealed by the property owner or the municipality to the state board of equalization in the same manner as other appeals from action of the county boards of equalization.
(a) In no case shall the back assessment or reassessment of real estate constitute a lien on the real estate that has, by bona fide sale, passed into the hands of innocent purchasers, but shall be a liability against the person owning the real estate at the time of the inadequate assessment.
(b) The burden of proving a bona fide sale shall be upon the person owning such real estate at the time of such back assessment or reassessment.
(c) Subsection (a) shall not apply to property that has wholly escaped taxation.
(a) A back assessment or reassessment must be initiated on or before September 1 of the year following the tax year for which the original assessment was made, unless the omission or underassessment resulted from failure of the taxpayer to file the reporting schedule required by law, from actual fraud or fraudulent misrepresentation of the property owner or the property owner's agent, or from collusion between the property owner or the property owner's agent and the assessor. In the latter cases, a back assessment or reassessment must be initiated on or before three (3) years from September 1 of the tax year for which the original assessment was made. Additional taxes due as the result of a back assessment or reassessment shall not be deemed delinquent until sixty (60) days after the date notice of taxes arising from the back assessment or reassessment is sent to the taxpayer, unless the back assessment or reassessment resulted from failure of the taxpayer to file the reporting schedule required by law, from actual fraud or fraudulent misrepresentation of the property owner or the property owner's agent, or from collusion between the property owner or the property owner's agent and the assessor. In the latter cases, such taxes shall become delinquent as of the date of delinquency of the original assessment.
(b) A back assessment or reassessment may be initiated by certification of the assessor of property to the appropriate collecting officials identifying the property and stating the basis of the back assessment or reassessment and the tax years and amount of any additional assessment for which the owner or taxpayer is responsible. The assessor shall send a copy of the certification to the owner or taxpayer. The collecting official shall then send a notice of taxes due based on the back assessment and reassessment. Any person aggrieved by a back assessment or reassessment may appeal directly to the state board of equalization within sixty (60) days from the date that a copy of the certification is sent to the taxpayer, in the manner provided in § 67-5-1412, and such person may be assisted or represented in the appeal as provided in § 67-5-1514. Accrual of delinquency penalty and interest otherwise applicable is suspended while the appeal is pending; but, during such period, simple interest shall accrue in the amount provided in § 67-5-1512.
(c) A back assessment or reassessment for merchants' taxes and delinquent privilege taxes pursuant to this part may be initiated by a chief administrative officer of a tax jurisdiction to which the tax is payable, any citizen of such jurisdiction, or by the department of revenue. The back assessment or reassessment shall be initiated by the filing of a sworn, written complaint to the county clerk stating the basis of the complaint. The clerk may require a complainant, other than a public official acting in the official's capacity, to post a reasonable bond for payment of costs of the proceeding if the back assessment or reassessment is unsuccessful. An aggrieved party may appeal the clerk's disposition of the complaint to the department.
(d) Notwithstanding the deadline in this section for initiating a back assessment or reassessment, the issuance of a notice of tangible personal property audit by the assessor tolls the running of the deadline during the period of the audit from the issuance of the notice until issuance of the audit findings.
(a) The officials having power to back assess or reassess property are vested with full authority to administer oaths, send for and examine witnesses, and take such steps as may be deemed necessary or material to obtain information and evidence as to the value of the property.
(b) Such witnesses, when properly summoned, shall be amenable to existing laws for nonattendance or failure to give evidence that is in their knowledge.
(a) The officials vested with the power to make back assessments or reassess have full authority, in a proceeding to back assess or reassess such property, to make proper, correct, and adequate assessment of the property at its actual cash value, which, when entered upon the tax book or filed in writing with the authorized tax collecting authority, shall become a final and valid assessment of the property and collectible as such as fully and amply as if originally entered upon the assessment roll.
(b) The assessment, when made by the official authorized to make the assessment, shall have the force and effect of a judgment against the person liable for the taxes for the year for which the reassessment is made.
If the back assessment or reassessment is sustained, the cost of the proceeding shall be added to the taxes and collectible as such. If the back assessment or reassessment is set aside, the cost shall be paid by the jurisdiction to which the taxes would have been payable, or by the complainant if the board determines the complaint was filed or prosecuted by the complainant without good cause. In a case of connivance, fraud, deception, misrepresentation, or failure to file a personal property schedule, the board may impose a penalty not to exceed fifteen percent (15%) of the taxes due, which shall be added to the taxes due and be collectible as such.
It is the duty of the county clerk to examine and compare the assessment rolls of the county with the inventories or reports of administrators and executors as soon as filed with the county clerk, for the purpose of ascertaining whether any personal property of any estate is subject under this chapter to back assessment or reassessment. In case such examination shows any personalty subject to such back assessment or reassessment, the clerk shall so report to the county trustee, who shall back assess or reassess the personalty under this part, and add the penalty previously designated.
In case the county clerk or county trustee fails or refuses to perform the duty imposed, such clerk or trustee shall become liable on the clerk's or trustee's official bond for the amount of taxes that might have been recovered had the duty been properly performed, together with the penalty of fifteen percent (15%) added to the taxes, the liability and penalty to be recovered in any court of record or before any general sessions court, at the instance of any district attorney general or proper agent of the state, by suit or by motion, on five (5) days' notice.
(a) Every collector of taxes, making assessments and collecting taxes under this chapter, shall keep a book upon which the collector shall enter all property assessed by the collector, giving a description of the property so assessed, the amount of taxes so collected and, upon the collector's final settlement with the commissioner and with the county legislative body, shall file a copy of the settlement, under oath, stating that the copy contains a true and a perfect list of all taxes so collected by the collector.
(b) Should the property in any district or ward, or any part of the district or ward, escape assessment or fail in any manner to be assessed, the trustee is required to assess the property at its actual cash value, and report the amount of the taxes collected on the property to the county legislative body as “picked up” taxes at the same time the trustee reports lists of errors, etc., giving a description of the property, district, or ward in which located.
(1) The county clerk is required to certify copies of the report to the officers with whom the trustee is required by law to settle.
(2) The trustee shall account for the property in making final settlements of the trustee's various accounts, but no assessment authorized by this part shall be made for any other years than for the years in which the assessments shall be made and for three (3) years preceding the assessment.
(a) An officer charged with the duty of collecting state revenues is empowered and authorized to issue a distress warrant for the collection of any state taxes, fees, fines, interest, penalties or other revenues, whenever in the officer's discretion the collecting officer deems it necessary to issue a distress warrant to safeguard the revenues of the state.
(b) The distress warrant may be addressed and delivered to the sheriff, any deputy sheriff or constable of the county in which the taxpayer has the taxpayer's office or principal place of business, or to the sheriff or any deputy sheriff or constable of any county in which the collecting officer has reason to believe property of such taxpayer may be found.
(a) The sheriff, any deputy sheriff or constable into whose hands such warrant may come may execute it by distraint and sale of personal property belonging to the taxpayer. The proceedings with respect to the sale shall be the same as are provided by law for proceedings under an execution at law from a court of record. The executing officer shall be entitled to the same fees, commissions, and necessary expenses of removing and keeping the property distrained as in the case of an execution from a court of record.
(b) It is the duty of the sheriff, any deputy sheriff or constable into whose hands such distress warrant may come, to make a return on the distress warrant within thirty (30) days from the date received. In the event any such officer fails to make the return as required by this section, the officer and the officer's bondspersons shall be personally liable for the amount set forth in the distress warrant.
Garnishments may be issued and executed by the sheriff, any deputy sheriff or constable in the same manner as garnishments are issued and executed on executions at law. Before issuing a garnishment, the sheriff, any deputy sheriff or constable shall cause such distress warrant to be entered on the docket of any court of general sessions or circuit court of the county, and the procedure in the execution of such garnishment shall be the same as now provided by the statute for the execution of garnishments in civil cases.
If the officer cannot find personal property to satisfy the distress warrant, the officer may levy the distress warrant upon any real estate in the officer's county belonging to the taxpayer. If levying on land, the distress warrant, together with the officers' return on the distress warrant, shall be returned to the circuit court of the county in which the land lies, and the land shall be condemned and sold under the orders of the circuit court in the same manner as in the case of the levy on land of an execution issued by a general sessions court.
(a) If the officer cannot find personal or real property belonging to the taxpayer to satisfy the distress warrant, the officer shall levy the distress warrant upon any equitable interest owned by the taxpayer in either personal or real property in the officer's county, the levy to be made on the equitable interest owned in personal property first and on the equitable interest owned in real property last.
(b) The officer shall serve a copy of the distress warrant levied upon the equitable interest, together with the officer's return on the distress warrant, on the holder of the legal title and the secured creditor of record, which may be done by registered mail, notifying them of the intention to request an order of sale by the chancery court. Thereafter, the officer shall return the distress warrant, which shall show notice to the legal title holder and to the secured creditor of record of the levy and intent to return, to the chancery court of the county in which the equitable interest was levied upon, and the equitable interest or the property, whichever is deemed necessary by the court, shall be sold under the orders of that court for the satisfaction of any indebtedness that is a prior lien on the property and for the satisfaction of the distress warrant.
(c) The distress warrant and return, together with any reply to the warrant, shall be heard before the chancellor after the second rule day after the distress warrant has been returned, the hearing on the distress warrant, which shall be subject to review by appeal, to have precedence over all other causes except those affecting state revenue. At the hearing, such orders of reference or of sale or otherwise, as may be necessary, shall be made to the end that the creditor's right shall be protected and the tax due the state may be collected as expeditiously as possible. The legality of the tax cannot be inquired into in this proceeding for any reason, the remedy of the taxpayer being expressly limited to that afforded under part 9 of this chapter.
(d) Nothing in this part shall allow a levy on estates held in realty by a husband and wife as tenants by the entireties, unless liability for the tax is joint with the husband and wife.
The remedy and procedure prescribed in this part is cumulative to any other remedies or procedures now prescribed with reference to any particular state taxes, fees, fines, penalties, interest and revenues. No other remedy prescribed by any particular taxing statute shall be held to be exclusive or to prevent the collecting officer from proceeding with the collection of the revenues under this part.
For the purpose of ascertaining the correctness of any tax return, making an assessment where no tax return has been made, determining the liability of any person, firm or corporation for any taxes or fees of any nature whatsoever that may be due or owing to the state of Tennessee, or for determining the liability at law or in equity of any transferee or fiduciary of any person, firm or corporation with respect of any taxes or fees due or owing to the state of Tennessee, or collecting any such liability, the commissioner of revenue, the comptroller of the treasury, or their duly authorized representatives, are authorized to:
(1) Examine any books, papers, records or other data that may be relevant or material to such inquiry;
(2) Summon the person, firm or corporation liable for taxes or fees or any officer or employee of such person, firm or corporation, or any person, firm or corporation having possession, custody or care of books of account containing entries relating to the business of the person, firm or corporation liable for taxes or fees, or any other person, firm or corporation the commissioner, the comptroller of the treasury, or their duly authorized representatives, may deem proper, to appear before the commissioner, comptroller of the treasury, or their duly authorized representatives, at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and
(3) Take such testimony of the person, firm or corporation concerned, under oath, as may be relevant to such inquiry.
It is the declared intent of this part that all persons, firms or corporations whatsoever having any knowledge pertaining to liabilities for taxes or fees due the state of Tennessee, and any books, papers, records or other data pertaining to liabilities for taxes or fees due the state of Tennessee, shall be subject to the subpoena power granted under this part.
Failure of any person, firm or corporation so subpoenaed to attend shall be certified by the commissioner of revenue or the comptroller of the treasury to the chancery court in whose judicial district such person, firm or corporation resides, and such chancery court shall exercise authority granted by law in the treating of contempt of court matters, including those powers granted in §§ 29-9-103 — 29-9-105; all to the end that the person, firm or corporation shall be compelled to appear at a time and place to be named by the chancery court.
Any person, firm or corporation who appears as summoned, but upon appearance refuses to testify on matters not privileged by law, shall be punished as prescribed in § 67-1-1303.
Any persons, firms or corporations so subpoenaed shall be reimbursed necessary traveling expenses from their homes to the place of hearing and other necessary expenses, as determined by the commissioner or the comptroller of the treasury, and those persons, firms or corporations not employees of the state shall be paid at the rate of five dollars ($5.00) per day for each day or portion of a day in attendance at such hearings.
(a) This part shall apply to every public tax, license or fee, and/or any penalty or interest payable thereon, levied under any existing or later enacted law that is codified in this or any other title and is collectible by the commissioner of revenue.
(b) The purpose of this part is to supplement and clarify existing provisions of the general law relating to the enforcement of state taxes and to compile in a single part the principal enforcement procedures previously enacted and codified in numerous other chapters of this title.
(c) In the event of any conflict between the provisions of this part and those of any other specific statutory provisions contained elsewhere in this title or in any other title, it is declared to be the legislative intent that, to the extent such other specific provisions are inconsistent with or different from this part, this part shall prevail. There shall be preserved and prevail over this part such other provisions of this title or of any other title that govern, restrict, or confer special authority or powers upon the commissioner or the commissioner's delegate in the exercise of each of their responsibilities to enforce the collection of public taxes and that are not inconsistent with this part, such as, but not limited to, such other provisions relating to confiscation and/or seizure and sale of contraband beer and/or other such beverages and tobacco products as set forth in title 57, chapter 2, and chapter 4, part 10 of this title.
(a) If any person liable to pay any state tax or fee administered by the commissioner of revenue neglects or refuses to pay the tax or fee, the amount, including additionally incurred taxes, fees, penalties, interest, and costs, shall be a lien in favor of the state. Such lien shall arise at the time an initial proposed assessment of any liability is made, and it shall continue until the amounts of the original proposed assessment and any subsequent assessments of liability for taxes, fees, penalties, interest, or costs are fully paid. The lien shall attach to all interests in property, either real or personal, tangible or intangible, in this state then owned or subsequently acquired by the person against whom the proposed assessment is made. For purposes of this section, the definition of “assessment” is as provided in this part and the rules promulgated pursuant to this part.
(b) The commissioner shall cause a notice of such lien to be recorded in the office of the county register of deeds in the county or counties in which the taxpayer's business or residence is located, or in any county in which the taxpayer has an interest in property, and such notice shall be recorded in the same manner as liens are recorded in that office. There shall be no fees collected by the county register at the time such a notice is recorded, but the county register shall extend credit to the department for such fees as are chargeable, and submit the county register's bill at the end of each month to the department in order to obtain payment. Such recordation shall constitute notice of both the original proposed assessment and all subsequent assessments of liability against the same taxpayer. Upon request, the department shall disclose the specific amount of liability at a given date to any interested party legally entitled to such information.
(c) The lien of the state of Tennessee for taxes or fees, or both, shall be superior to all liens and security interests created under Tennessee law except:
(1) County and municipal ad valorem taxes;
(2) Deeds or deeds of trust that are recorded prior to the recordation of notice of the state lien;
(3) Security interests created pursuant to Article 9 of the Uniform Commercial Code, compiled in title 47, chapter 9, that require filing for perfection and that are properly filed prior to recordation of the notice of the state lien;
(4) Security interests perfected under the Uniform Commercial Code without filing, as provided in title 47, chapter 9, that are properly perfected prior to recordation of the notice of the state lien; and
(5) Vendors' liens on real estate provided for in title 66, chapter 10 that are recorded prior to the recordation of notice of the state lien.
(d) Notwithstanding any other law to the contrary, the lien for taxes imposed by chapter 8, parts 2-5 of this title shall arise at the date of death, and the lien for taxes imposed by chapter 8, part 1 of this title shall arise at the date of gift and shall attach to any interest in property transferred and to any interest in property acquired in exchange or substitution for any property transferred.
(e) Nothing in this section shall be interpreted to give the state priority over any deed of trust or any security interest perfected under the Uniform Commercial Code, compiled in title 47, that is filed prior to the filing of the notice of state tax lien, regardless of when such taxes are assessed.
(f)
(1) The notice of lien required to be filed under subsection (b), or any renewal of the lien, shall be effective for ten (10) years from the date of filing. Any such notice of lien that has remained on file for more than ten (10) years, without renewal, shall be null and void against all persons.
(2) The commissioner may cause a renewal of such notice of lien to be filed prior to the expiration of ten (10) years from the filing of the original notice, if a lien in favor of the state under subsection (a) continues to exist against the taxpayer. If such renewal is filed prior to the expiration of the ten-year period, the priority of the state lien for taxes covered by the notice shall continue to be determined under subsection (c), based on the date of filing of the original notice of lien.
(g) Any right to redemption referred to in this part shall not be affected by subsection (f).
If any person liable to pay any tax neglects or refuses to pay the tax within ten (10) days after notice and demand, it shall be lawful for the commissioner or the commissioner's delegate to collect the tax, and any further sum as shall be sufficient to cover the expenses of the levy, by levy upon all property, and rights to property, belonging to the person or on which there is a lien provided by law for the payment of the tax.
(a) If the commissioner or the commissioner's delegate makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the commissioner or the commissioner's delegate, and, upon failure or refusal to pay such tax, collection of the tax by levy shall be lawful without regard to the ten-day period provided in § 67-1-1405.
(b) Before a levy is made under § 67-1-1405 upon the salary or wages of a person with respect to any unpaid tax, the commissioner or the commissioner's delegate shall notify the person in writing of an intention to do so. The notice shall be given not less than ten (10) days before the date of the levy by delivering it in person, or by leaving it at the dwelling or usual place of business of the person, or by mailing it to the person's last known address.
(c) The ten-day period provided for in subsection (b) does not apply to a levy, if the commissioner or the commissioner's delegate has made a finding pursuant to subsection (a) that the collection of the tax is in jeopardy.
(a) A levy shall extend only to property possessed and obligations existing at the time of the levy. In any case in which the commissioner or the commissioner's delegate may levy upon property or rights to property, the commissioner or the commissioner's delegate may seize and sell such property or rights to property, whether real or personal, tangible or intangible. Personal property exemptions provided in title 26, chapter 2 shall not be applicable.
(b)
(1) Enumeration. There shall be exempt from levy:
(A) Wearing Apparel and School Books. Such items of wearing apparel and such school books as are necessary for the taxpayer or for members of the taxpayer's family;
(B) Fuels, Provisions, Furniture, and Personal Effects. If the taxpayer is the head of the family, so much of the fuel, provisions, furniture, and personal effects in the taxpayer's household, and of the arms for personal use, livestock, and poultry of the taxpayer, as does not exceed five hundred dollars ($500) in value;
(C) Books and Tools of a Trade, Business, or Profession. So many of the books and tools necessary for the trade, business or profession of the taxpayer as do not exceed in the aggregate two hundred fifty dollars ($250) in value; and
(D) Unemployment Benefits. Any amount payable to an individual with respect to the individual's unemployment, including any portion of the amount payable with respect to dependents, under the unemployment compensation law of this state.
(2) Appraisal. The officer seizing property of the type described in subdivision (b)(1) shall appraise and set aside to the owner the amount of such property declared to be exempt. If the taxpayer objects at the time of the seizure to the valuation fixed by the officer making the seizure, the commissioner or the commissioner's delegate shall summon three (3) disinterested individuals who shall make the valuation.
(3) No Other Property Exempt. Notwithstanding any other law of this state, no property or rights to property shall be exempt from levy other than the property specifically made exempt by subdivision (b)(1).
(a) The effect of a levy on salary or wages payable to or receivable by a taxpayer shall be continuous from the date a levy is made until the liability out of which the levy arose is satisfied or becomes unenforceable by reason of lapse of time, or until the expiration of the employer's payroll period that ends immediately prior to three (3) calendar months after the levy is made, whichever occurs first.
(b) With respect to a levy made under this section, the commissioner or the commissioner's delegate shall promptly release the levy when the liability out of which it arose is satisfied or becomes unenforceable by reason of lapse of time, and shall promptly notify the person upon whom the levy was made that it has been released.
(c) If, pursuant to subsection (a), the period of effectiveness for a levy expires prior to the time the liability out of which the levy arose is satisfied or becomes unenforceable by reason of lapse of time, the commissioner or the commissioner's delegate may subsequently proceed to levy on salary or wages in like manner as often as may be necessary until the liability out of which the levy arose is fully satisfied or becomes unenforceable by reason of lapse of time.
Whenever any property or right to property upon which levy has been made by virtue of § 67-1-1405 is not sufficient to satisfy the claim of the state for which levy is made, the commissioner or the commissioner's delegate may, thereafter, as often as may be necessary, proceed to levy in like manner upon any other property liable to levy of the person against whom such claims exist, until the amount due from the taxpayer, together with all expenses, is fully paid.
(a) If the commissioner or the commissioner's delegate, at the time of the levy, shall determine that it is in the best interest of both the state and taxpayer, the commissioner or the commissioner's delegate may place padlocks on the doors of any business enterprise that is delinquent in filing and/or paying state taxes. The commissioner or the commissioner's delegate shall also post notices of levy and distraint on each of the doors so padlocked.
(b) If, within three (3) working days, the tax deficiency has not been satisfied or satisfactory arrangements for payment made, the commissioner or the commissioner's delegate shall obtain written permission from the owner of the premises, or remove the property levied upon from the premises.
(c) It is a Class C misdemeanor for anyone to enter the padlocked premises without prior approval of the commissioner or the commissioner's delegate.
In the event the person against whom the levy and distraint, as provided in this part, has appealed the ruling of the commissioner on the tax sought to be collected or a suit contesting the collection of the subject tax is pending in a court of competent jurisdiction, the person shall have the right to post bond equaling the amount of the tax liability in lieu of payment until the appeal or suit is finalized. Further, if the taxpayer is successful in the taxpayer's appeal, then the state shall pay the taxpayer interest at the rate of six percent (6%) per annum on the amount of tax liability in question.
(a) Requirement. Any person in possession of, or obligated with respect to, property or rights to property subject to levy upon which a levy has been made shall, upon demand of the commissioner or the commissioner's delegate, surrender such property or rights, or discharge such obligation, to the commissioner or the commissioner's delegate, except such part of the property or rights as is, at the time of such demand, subject to an attachment or execution under any judicial process.
(b) Enforcement of Levy.
(1) Extent of Personal Liability. Any person who fails or refuses to surrender any property or rights to property, subject to levy, upon demand by the commissioner or the commissioner's delegate, shall be liable in that person's own person and estate to the state in a sum equal to the value of the property or rights not so surrendered, but not exceeding the amount of taxes for the collection of which such levy has been made, together with costs and interest on such sum at the rate of six percent (6%) per annum from the date of such levy. Any amount other than costs recovered under this subdivision (b)(1) shall be credited against the tax liability for the collection of which such levy was made.
(2) Penalty for Violation. In addition to the personal liability imposed by subdivision (b)(1), if any person required to surrender property or rights to property fails or refuses to surrender such property or rights to property without reasonable cause, such person shall be liable for a penalty equal to fifty percent (50%) of the amount recoverable under subdivision (b)(1). No part of such penalty shall be credited against the tax liability for the collection of which such levy was made. Such amount shall be paid into the general fund.
(c) Effect of Honoring Levy. Any person in possession of, or obligated with respect to, property or rights to property subject to levy upon which a levy has been made who, upon demand by the commissioner or the commissioner's delegate, surrenders such property or rights to property or discharges such obligation to the commissioner or the commissioner's delegate or who pays a liability under subdivision (b)(1) shall be discharged from any obligation or liability to the delinquent taxpayer with respect to such property or rights to property arising from such surrender or payment. In the case of a levy that is satisfied pursuant to subsection (b), such person shall also be discharged from any obligation or liability to any beneficiary arising from such surrender or payment.
(d) “Person” Defined. “Person,” as used in subsection (a), includes an officer or employee of a corporation or a member or employee of a partnership who, as such officer, employee or member, is under a duty to surrender the property or rights to property, or to discharge the obligation.
If a levy has been made or is about to be made on any property or right to property, any person having custody or control of any books or records, containing evidence or statements relating to the property or right to property subject to levy shall, upon demand of the commissioner or the commissioner's delegate, exhibit such books or records to the commissioner or the commissioner's delegate.
As soon as practicable after seizure of property, notice in writing shall be given by the commissioner or the commissioner's delegate to the owner of the property, or, in the case of personal property, the possessor of the personal property, or shall be left at the owner's or possessor's usual place of abode or business if the owner or possessor has such within the state. If the owner cannot be readily located, or has no dwelling or place of business within the state, the notice may be mailed to the owner's last known address. Such notice shall specify the sum demanded and shall contain, in the case of personal property, an account of the property seized and, in the case of real property, a description, with reasonable certainty, of the property seized.
The commissioner or the commissioner's delegate shall, as soon as practicable after the seizure of the property, give notice to the owner, in the manner prescribed in § 67-1-1414. The notice shall be given not less than thirty (30) days before the date the property seized is sold, and cause a notification to be published in some newspaper published or generally circulated within the county in which such seizure is made, or if there is no newspaper published or generally circulated in such county, post such notice at the county courthouse, and in not less than two (2) other public places. Such notice shall specify the property to be sold, and the time, place, manner and conditions of the sale of the property. Whenever levy is made without regard to the ten-day period provided in § 67-1-1405, public notice of sale of the property seized shall not be made within such ten-day period unless § 67-1-1419, relating to sale of perishable goods, is applicable.
If any property liable to levy is not divisible so as to enable the commissioner or the commissioner's delegate by sale of a part of the property to raise the whole amount of the tax and expenses, the whole of such property shall be sold.
The time of sale shall not be less than ten (10) days nor more than forty (40) days from the time of giving public notice under § 67-1-1415. The place of sale shall be within the county in which the property is seized, except by special order of the commissioner or the commissioner's delegate.
(a) Minimum Price. Before the sale, the commissioner or the commissioner's delegate shall determine a minimum price for which the property shall be sold, and if no person offers for such property at the sale the amount of the minimum price, the property shall be declared to be purchased at such price for the state; otherwise, the property shall be declared to be sold to the highest bidder. In determining the minimum price, the commissioner or the commissioner's delegate shall take into account the expense of making the levy and sale.
(b) Additional Rules Applicable to Sale. The commissioner shall by regulations prescribe the manner and other conditions of the sale of property seized by levy. If one (1) or more alternative methods or conditions are permitted by regulations, the commissioner or the commissioner's delegate shall select the alternatives applicable to the sale. Such regulations shall provide:
(1) That the sale shall not be conducted in any manner other than:
(A) By public auction;
(B) By public internet auction; or
(C) By public sale under sealed bids;
(2) In the case of the seizure of several items of property, whether such items shall be offered separately, in groups, or in the aggregate; and whether, those items shall be sold under whichever method produces the highest aggregate amount;
(3) Whether the announcement of the minimum price determined by the commissioner or the commissioner's delegate may be delayed until the receipt of the highest bid;
(4) Whether payment in full shall be required at the time of acceptance of a bid, or whether a part of such payment may be deferred for such period, not to exceed one (1) month, as may be determined by the commissioner or the commissioner's delegate to be appropriate;
(5) The extent to which methods, including advertising, in addition to those prescribed in § 67-1-1415, may be used in giving notice of the sale; and
(6) Under what circumstances the commissioner or the commissioner's delegate may adjourn the sale from time to time, but such adjournments shall not be for a period to exceed in total one (1) month.
(c) Payment of Amount Bid. If payment in full is required at the time of acceptance of a bid and is not then and there paid, the commissioner or the commissioner's delegate shall forthwith proceed to again sell the property in the manner provided in this section. If the conditions of the sale permit part of the payment to be deferred, and if such part is not paid within the prescribed period, suit may be instituted against the purchaser for the purchase price of such part of the purchase price as has not been paid, together with interest at the rate of six percent (6%) per annum from the date of the sale; or, in the discretion of the commissioner or the commissioner's delegate, the sale may be declared by the commissioner or the commissioner's delegate to be null and void for failure to make full payment of the purchase price, and the property may again be advertised and sold as provided in §§ 67-1-1415, 67-1-1416 and this section. In the event of such readvertisement and sale, any new purchaser shall receive such property, or rights to property, free and clear of any claim or right of the former defaulting purchaser, of any nature whatsoever, and the amount paid upon the bid price by such defaulting purchaser shall be forfeited.
If the commissioner or the commissioner's delegate determines that any property seized is liable to perish or become greatly reduced in price or value by keeping, or that such property cannot be kept without great expense, the commissioner or the commissioner's delegate shall appraise the value of such property and:
(1) Return to Owner. If the owner of the property can be readily found, the commissioner or the commissioner's delegate shall give such owner notice of such determination of the appraised value of the property. The property shall be returned to the owner if, within such time as may be specified in the notice, the owner:
(A) Pays to the commissioner or the commissioner's delegate an amount equal to the appraised value; or
(B) Gives bond in such form with such sureties, and, in such amount as the commissioner or the commissioner's delegate shall prescribe, to pay the appraised amount at such time as the commissioner or the commissioner's delegate determines to be appropriate in the circumstances;
(2) Immediate Sale. If the owner does not pay such amount or furnish such bond in accordance with this section, the commissioner or the commissioner's delegate shall as soon as practicable make public sale of the property in accordance with such regulations as may be prescribed by the commissioner.
(a) Before Sale. Any person whose property has been levied upon shall have the right to pay the amount due, together with the expenses of the proceeding, if any, to the commissioner or the commissioner's delegate at any time prior to the sale of the property, and, upon such payment, the commissioner or the commissioner's delegate shall restore such property to the person, and all further proceedings in connection with the levy on such property shall cease from the time of such payment.
(b) Redemption of Real Estate After Sale.
(1) Period. The owners of any real property sold as provided in §§ 67-1-1414 — 67-1-1418, their heirs, executors or administrators, or any person having any interest in the property, or a lien on the property, or any person in their behalf, shall be permitted to redeem the property sold, or any particular tract of such property, at any time within one hundred twenty (120) days after the sale of the property.
(2) Price. Such property or tract of property shall be permitted to be redeemed upon payment to the purchaser, or in case the purchaser cannot be found in the county in which the property to be redeemed is situated, then to the commissioner or the commissioner's delegate, for the use of the purchaser, the purchaser's heirs, or assigns, the amount paid by such purchaser and interest on the amount paid at the current composite prime rate as published by the federal reserve board as of the date of purchase.
(3) Record. When any lands sold are redeemed as provided in this section, the commissioner or the commissioner's delegate shall cause entry of the fact to be made upon the record provided for in § 67-1-1424, and such entry shall be evidence of such redemption.
(a) In the case of property sold as provided in §§ 67-1-1414 — 67-1-1418, the commissioner or the commissioner's delegate shall give to the purchaser a certificate of sale upon payment in full of the purchase price. In the case of real property, such certificate shall set forth the real property purchased, for those taxes the property was sold, the name of the purchaser, and the price paid for the property.
(b) In all cases of sale pursuant to §§ 67-1-1414 — 67-1-1418 of property other than real property, the certificate of such sale:
(1) As Evidence. Shall be prima facie evidence of the right of the officer to make such sale and conclusive evidence of the regularity of the officer's proceedings in making the sale;
(2) As Conveyances. Shall transfer to the purchaser all right, title, and interest of the party delinquent in and to the property sold;
(3) As Authority for Transfer of Corporate Stock. If such property consists of stocks, shall be notice, when received, to any corporation, company, or association of such transfer, and shall be authority to such corporation, company, or association to record the transfer on its books and records in the same manner as if the stocks were transferred or assigned by the party holding the same, in lieu of any original or prior certificate, which shall be void, whether cancelled or not;
(4) As Receipts. If the subject of sale is securities or other evidences of debt, it shall be a good and valid receipt to the person holding the same, as against any person holding or claiming to hold possession of such securities or other evidences of debt; and
(5) As Authority for Transfer of Title to Motor Vehicle. If such property consists of a motor vehicle, shall be notice, when received, to any public official charged with the registration of title to motor vehicles, of such transfer and shall be authority to such official to record the transfer on the official's books and records in the same manner as if the certificate of title to such motor vehicle were transferred or assigned by the party holding the registration of title, in lieu of any original or prior certificate, which shall be void, whether cancelled or not.
(1) In the case of any real property sold as provided in §§ 67-1-1414 — 67-1-1418 and not redeemed in the manner and within the time provided in § 67-1-1420, the commissioner or the commissioner's delegate shall execute to the purchaser of such real property at such sale, upon the purchaser's surrender of the certificate of sale, a deed of the real property so purchased by the purchaser, reciting the facts set forth in the certificate.
(2) If real property is declared purchased by the state at a sale pursuant to §§ 67-1-1414 — 67-1-1418, the commissioner or the commissioner's delegate shall at the proper time execute a deed for the property and without delay cause such deed to be duly recorded in the proper registry of deeds.
(b) In the case of the sale of real property pursuant to §§ 67-1-1414 — 67-1-1418, the deed of such sale:
(1) As Evidence. The deed of sale given pursuant to subsection (a) shall be prima facie evidence of the facts stated in the deed; and
(2) As Conveyance of Title. If the proceedings of the commissioner or the commissioner's delegate as set forth have been substantially in accordance with the provisions of law, such deed shall be considered and operate as a conveyance of all the right, title, and interest the party delinquent had in and to the real property thus sold at the time the lien of the state attached to the property.
A certificate of sale of personal property given or a deed to real property executed pursuant to § 67-1-1421 or § 67-1-1422 shall discharge such property from all liens, encumbrances, and titles over which the lien of the state with respect to which the levy was made had priority.
(a) Requirement. The commissioner or the commissioner's delegate shall keep a record of all sales of real property under §§ 67-1-1414 — 67-1-1418 and of redemptions of such property. The record shall set forth the tax for which any such sale was made, the dates of seizure and sale, the name of the party assessed and all proceedings in making such sale, the amount of expenses, the names of the purchasers, and the date of the deed.
(b) Copy as Evidence. A copy of such record, or any part of the record, certified by the commissioner or the commissioner's delegate shall be evidence in any court of the truth of the facts stated in the record.
(a) Collection of Liability. Any money realized by proceedings under this chapter, whether by seizure, by surrender under § 67-1-1412, except pursuant to § 67-1-1412(b)(2), or by sale of seized property, or by sale of property redeemed by the state, if the interest of the state in such property was a lien arising under this title, shall be applied as follows:
(1) Expense of Levy and Sale. The expenses of the proceedings should be deducted from the money received first;
(2) Specific Tax Liability on Seized Property. If the property seized and sold is subject to a tax imposed by any revenue law that has not been paid, the amount remaining after applying subdivision (a)(1) shall then be applied against such tax liability and, if such tax was not previously assessed, a notice of proposed assessment shall then be issued; and
(3) Liability of Delinquent Taxpayer. The amount, if any, remaining after applying subdivisions (a)(1) and (2) shall then be applied against the liability with respect to which the levy was made or the sale was conducted.
(b) Surplus Proceeds. Any surplus proceeds remaining after the application of subsection (a) shall, upon application and satisfactory proof in support of a surplus, be credited or refunded by the commissioner or the commissioner's delegate to the person or persons legally entitled to the surplus.
It is lawful for the commissioner or the commissioner's delegate under regulations prescribed by the commissioner, to release the levy upon all or part of the property or rights to property levied upon where the commissioner or the commissioner's delegate determines that such action will facilitate the collection of the liability, but such release shall not operate to prevent any subsequent levy.
(a) If the commissioner or the commissioner's delegate determines that property has been wrongfully levied upon, it shall be lawful for the commissioner or the commissioner's delegate to return:
(1) The specific property levied upon;
(2) An amount of money equal to the amount levied upon; or
(3) An amount of money equal to the amount of money received by the state from a sale of such property.
(b) An amount equal to the amount of money levied upon or received from such sale may be returned at any time before the expiration of nine (9) months from the date of such levy. For purposes of subdivision (a)(3), if property is declared purchased by the state at a sale pursuant to § 67-1-1418(a), relating to manner and conditions of sale, the state shall be treated as having received an amount of money equal to the minimum price determined pursuant to such section or, if larger, the amount received by the state from the resale of such property.
(1) Where the assessment of any tax imposed by this or any other title has been made within the applicable period of limitation, such tax may be collected by levy or by a proceeding in court, but only if the levy is made or the proceeding begun:
(A) Within six (6) years after the assessment of the tax becomes final; or
(B) Prior to the expiration of any period for collection agreed upon in writing by the commissioner or the commissioner's delegate and the taxpayer before the expiration of such six-year period; or, if there is a release of levy under § 67-1-1427 after such six-year period, then before such release. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the previously agreed upon period.
(2) The period provided by this subsection (a) during which a tax may be collected by levy shall not be extended or curtailed by reason of a judgment against the taxpayer.
(3) The period for collection provided in subdivision (a)(1)(A) shall not apply if the tax liability has been reduced to judgment in a suit begun within such period. Such tax may be collected at any time subsequent to assessment without limitation after such judgment.
(4) Nothing in this section shall apply to the collection of ad valorem taxes assessed against real or personal property by any county or municipality in this state.
(5) The period for collection provided in subdivision (a)(1)(A) ceases running upon the imposition of a bankruptcy stay as provided in 11 U.S.C. § 362 or upon the filing of a probate, receivership, or assignment for the benefit of creditors proceeding. Such period recommences running thirty (30) days after the stay is lifted or the proceeding prohibiting collection ends.
(b) Date When Levy Is Considered Made. The date on which a levy on property or rights is made shall be the date on which the notice of seizure provided in § 67-1-1414 is given.
(c) Release of Lien. At any time after the expiration of the period specified in subsection (a), the person holding title to the property on which the lien is placed may request the department to release the lien. If the department does not release the lien within sixty (60) days of the request, it shall be liable for court costs in any action to remove the lien.
(1) In General. If the commissioner or the commissioner's delegate finds that a taxpayer designs to depart quickly from the state or to remove the taxpayer's property from the state, or to conceal the taxpayer or the taxpayer's property in the state, or to do any other act tending to prejudice or to render wholly or partly ineffectual proceedings to collect the state tax for the current or the preceding taxable periods unless such proceedings be brought without delay, the commissioner or the commissioner's delegate shall declare the taxable period for such taxpayer immediately terminated, and shall cause notice of such finding and declaration to be given the taxpayer, together with a demand for immediate payment of the tax for the taxable period so declared terminated and of the tax for the preceding taxable period or so much of such tax as is unpaid, whether or not the time otherwise allowed by law for filing return and paying the tax has expired; and such taxes shall then become immediately due and payable. In any proceeding in court brought to enforce payment of taxes made due and payable by virtue of this section, the finding of the commissioner or the commissioner's delegate, made as provided in this section, whether made after notice to the taxpayer or not, shall be for all purposes presumptive evidence of jeopardy.
(2) Corporation in Liquidation. If the commissioner or the commissioner's delegate finds that the collection of the tax of a corporation for the current or the preceding taxable period will be jeopardized by the distribution of all or a portion of the assets of such corporation in the liquidation of the whole or any part of its capital stock, the commissioner or the commissioner's delegate shall declare the taxable period for such taxpayer immediately terminated and shall cause notice of such finding and declaration to be given the taxpayer, together with a demand for immediate payment of the tax for the taxable period so declared terminated and of the tax for the preceding taxable period or so much of such tax as is unpaid, whether or not the time otherwise allowed by law for filing a return and paying the tax has expired. Such taxes shall then become immediately due and payable.
(b) Reopening of Taxable Period. Notwithstanding the termination of the taxable period of the taxpayer by the commissioner or the commissioner's delegate, as provided in subsection (a), the commissioner or the commissioner's delegate may reopen such taxable period each time the taxpayer is found by the commissioner or the commissioner's delegate to have a taxable occurrence within the taxable period since a termination of the period under subsection (a). A taxable period so terminated by the commissioner or the commissioner's delegate may be reopened by the taxpayer if the taxpayer files with the commissioner or the commissioner's delegate a true and accurate return for such taxable period, together with such other information as the commissioner may by regulation prescribe.
(c) Furnishing of Bond Where Taxable Period Is Closed by the Commissioner or the Commissioner's Delegate. Payment of taxes shall not be enforced by any proceedings under this section prior to the expiration of the time otherwise allowed for paying such taxes if the taxpayer furnishes, under regulations prescribed by the commissioner, a bond to ensure the timely making of returns with respect to, and payment of, such taxes.
(d) Jeopardy Assessments. If the commissioner or the commissioner's delegate believes that the collection of any tax under any provision of this or any other title will be jeopardized by delay, the commissioner or the commissioner's delegate shall, whether or not the time otherwise prescribed by law for making return and paying such tax has expired, immediately assess such tax, together with all interest, penalties, and any other additions to the tax provided for by law. Such tax, interest, penalties and additions to the tax shall then become immediately due and payable, and immediate notice and demand shall be made by the commissioner or the commissioner's delegate for the payment thereof.
(a) Filing. In any case where there has been a refusal or neglect to pay any tax, or to discharge any liability with respect to any tax, whether or not levy has been made, the attorney general and reporter or the attorney general and reporter's delegate, or the staff attorney of the department of revenue or the staff attorney's delegate, at the request of the commissioner or the commissioner's delegate, may direct a civil action to be filed in chancery court to enforce the lien of the state under this title with respect to such tax or liability or to subject any property, of whatever nature, of the delinquent, or in which the delinquent has any right, title, or interest, to the payment of such tax or liability.
(b) Parties. All persons having liens upon or claiming any interest in the property involved in such action shall be made parties to the case.
(c) Adjudication and Decree. The court shall, after the parties have been duly notified of the action, proceed to adjudicate all matters involved in the action and finally determine the merits of all claims to and liens upon the property, and, in all cases where a claim or interest of the state in the action is established, may decree a sale of such property, by the proper officer of the court, and a distribution of the proceeds of such sale according to the findings of the court with respect to the interests of the parties and of the state. If the property is sold to satisfy a first lien held by the state, the state may bid at the sale such sum, not exceeding the amount of such lien with expenses of sale, as the commissioner or the commissioner's delegate directs.
(d) Receivership. In any such proceeding, at the instance of the state, the court may appoint a receiver to enforce the lien or, upon certification by the commissioner or the commissioner's delegate during the pendency of such proceedings that it is in the public interest, may appoint a receiver with all the powers of a receiver in equity.
(e) Intervention by State. If the state is not a party to a civil action or suit, the state may intervene in such action or suit to assert any lien arising under this title on the property that is the subject of such action or suit. In any case in which the application of the state to intervene is denied, the adjudication in such action or suit shall have no effect upon such lien.
(a) If the state is not joined as a party, a judgment in any civil action or suit, or a judicial sale pursuant to such a judgment, with respect to property on which the state has or claims a lien under this title:
(1) Shall be made subject to and without disturbing the lien of the state, if notice of such lien has been filed in the place provided by law for such filing at the time such action or suit is commenced; or
(2) If a judicial sale of property pursuant to a judgment in any civil action or suit to which the state is not a party discharges a lien of the state arising under this title, the state may claim, with the same priority as its lien had against the property sold, the proceeds, exclusive of costs, of such sale at any time before the distribution of such proceeds is ordered.
(b)
(1) Notwithstanding subsection (a), a sale of property on which the state has or claims a lien, or a title derived from enforcement of a lien, under this title, made pursuant to an instrument creating a lien on such property, pursuant to a confession of judgment on the obligation secured by such an instrument, or pursuant to a nonjudicial sale under a statutory lien on such property shall, except as otherwise provided, be made subject to and without disturbing such lien or title, if notice of such lien was filed or such title recorded in the place provided by law for such filing or recording more than thirty (30) days before such sale, and the state is not given notice of such sale in the manner prescribed in subdivision (b)(2).
(2) Special Rules.
(A) Notice of Sale. Notice of a sale to which subdivision (b)(1) applies shall be given, in accordance with regulations prescribed by the commissioner, in writing, by registered or certified mail or by personal service, not less than twenty-five (25) days prior to such sale, to the commissioner or the commissioner's delegate.
(B) Consent to Sale. Notwithstanding the notice requirement of this subsection (b), a sale described in subdivision (b)(1) of property shall discharge or divest such property of the lien or title of the state, if the state consents to the sale of such property free of such lien or title.
(C) Sale of Perishable Goods. Notwithstanding the notice requirement of this section, a sale described in subdivision (b)(1) of property liable to perish or become greatly reduced in price or value by keeping, or that cannot be kept without great expense, shall discharge or divest such property of the lien or title of the state if notice of such sale is given, in accordance with regulations prescribed by the commissioner, in writing, by registered or certified mail or by personal service, to the commissioner or the commissioner's delegate before such sale. The proceeds, exclusive of costs, of such sale shall be held as a fund subject to the liens and claims of the state, in the same manner and with the same priority as such liens and claims had with respect to the property sold, for not less than thirty (30) days after the date of such sale.
(c)
(1) Right to Redeem. In the case of a sale of real property to which subdivision (b)(1) applies, to satisfy a lien prior to that of the state, the commissioner or the commissioner's delegate may redeem such property within the period allowable for redemption under law, as provided in § 67-1-1420.
(2) Amount to Be Paid. In any case in which the state redeems real property pursuant to subdivision (c)(1), the amount to be paid for such property shall be the amount paid by the purchaser, plus six percent (6%) interest per annum.
(3) Certificate of Redemption.
(A) In General. In any case in which real property is redeemed by the state pursuant to this subsection (c), the commissioner or the commissioner's delegate shall execute a certificate of redemption for the property.
(B) Filing. The commissioner or the commissioner's delegate shall, without delay, cause such certificate to be duly recorded in the proper registry of deeds.
(C) Effect. A certificate of redemption executed by the commissioner or the commissioner's delegate shall constitute prima facie evidence of the regularity of such redemption and shall, when recorded, transfer to the state all the rights, title, and interest in and to such property acquired by the person from whom the state redeems such property by virtue of the sale of such property.
(1) Wrongful Levy. If a levy has been made on property, or property has been sold pursuant to a levy, any person, other than the person against whom is assessed the tax out of which such levy arose, who claims an interest in or lien on such property and that such property was wrongfully levied upon may file a claim with the state board of claims.
(2) Surplus Proceeds. If property has been sold pursuant to a levy, any person, other than the person against whom is assessed the tax out of which such levy arose, who claims an interest in or lien on such property junior to that of the state and to be legally entitled to the surplus proceeds of such sale may bring a civil action against the commissioner in chancery court.
(3) Substituted Sale Proceeds. If property has been sold pursuant to an agreement whereby the commissioner has released that property from the liens and claims of the state of Tennessee in return for liens and claims of the same priority against the proceeds of the sale of the released property, any person who claims to be legally entitled to all or any amount of such substituted sale proceeds held as a fund pursuant to such agreement may bring a civil action against the commissioner in the chancery court.
(b) Adjudication. The chancery court shall have jurisdiction to grant only such of the following forms of relief as may be appropriate in the circumstances:
(1) Injunction. If a levy or sale would irreparably injure rights in property that the court determines to be superior to rights of the state in such property, the court may grant an injunction to prohibit the enforcement of such levy or to prohibit such sale;
(2) Recovery of Property.
(A) If the court determines that such property has been wrongfully levied upon, the court may:
(i) Order the return of specific property, if the state is in possession of such property;
(ii) Grant a judgment for the amount of money levied upon; or
(iii) Grant a judgment for an amount not exceeding the amount received by the state from the sale of such property;
(B) For purposes of subdivision (b)(2)(A)(iii), if the property was declared purchased by the state at a sale pursuant to § 67-1-1418(a), relating to manner and conditions of sale, the state shall be treated as having received an amount equal to the minimum price determined pursuant to such section or, if larger, the amount received by the state from the resale of such property;
(3) Surplus Proceeds. If the court determines that the interest or lien of any party to an action under this section was transferred to the proceeds of a sale of such property, the court may grant a judgment in an amount equal to all or any part of the amount of the surplus proceeds of such sale; or
(4) Substituted Sale Proceeds. If the court determines that a party has an interest in or lien on the amount held as a fund pursuant to an agreement, the court may grant a judgment in an amount equal to all or any part of the amount of such fund.
(c) Validity of Assessment. For purpose of an adjudication under this section, the assessment of tax upon which the interest or lien of the state is based shall be conclusively presumed to be valid.
(d) Limitation on Rights of Action. No action may be maintained against any officer or employee of the state, or former officer or employee, or the officer's or employee's personal representative with respect to any acts for which an action could be maintained under this section.
(e) Requirements for Beginning or Proceeding with Action.
(1) No suit or proceeding under this section shall be begun unless a request is made by certified mail, within nine (9) months of the date of the levy, for the return of money or property pursuant to § 67-1-1428.
(2) No suit or proceeding under this section shall be begun after twelve (12) months from the date of filing the request required under subdivision (e)(1) or after six (6) months from the date of mailing, by certified mail, of a notice to the person making the request, of disallowance by the commissioner or the commissioner's delegate, whichever period ends sooner.
Any personal property acquired by the state in payment of or as security for debts arising under any provision of this or any other title may be sold by the commissioner or the commissioner's delegate in accordance with regulations as may be prescribed by the commissioner.
The commissioner or the commissioner's delegate shall have charge of all real estate that is or shall become the property of the state by judgment of forfeiture under any provision of this or any other title, or that has been or shall be assigned, set off, or conveyed by purchase or otherwise to the state in payment of debts or penalties arising thereunder, or that has been or shall be vested in the state by mortgage or other security for the payment of such debts, or that has been redeemed by the state, and of all trusts created for the use of the state in payment of such debts due them.
(a) Examination of Books and Witnesses. For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any amount under this or any other title, the commissioner or the commissioner's delegate is authorized to:
(1) Examine any books, papers, records, or other data that may be relevant or material to such inquiry;
(2) Summon the person liable for tax or required to perform the act, or any officer or employee of such person, or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax or required to perform the act, or any other person the commissioner or the commissioner's delegate may deem proper, to appear before the commissioner or the commissioner's delegate at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and
(3) Take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry.
(b) Summons.
(1) Service. A summons issued under subdivision (a)(2) shall be served by the commissioner or the commissioner's delegate by an attested copy delivered in hand to the person to whom it is directed or left at that person's last and usual place of abode; and the certificate of service signed by the person serving the summons shall be evidence of the facts it states on the hearing of an application for the enforcement of the summons. When the summons requires the production of books, papers, records or other data, it shall be sufficient if such books, papers, records or other data are described with reasonable certainty.
(2) Time and Place. The time and place of examination shall be such as may be fixed by the commissioner or the commissioner's delegate and as are reasonable under the circumstances. In no event shall the time be less than ten (10) days to appear to testify, or to produce books, papers, records or other data. The chancery court for the district in which such person resides or is found shall have jurisdiction by appropriate process to compel such attendance, testimony, or production of books, papers, records or other data.
(3) Enforcement. Whenever any person summoned under subdivision (a)(2) neglects or refuses to obey such summons, or to produce books, papers, records or other data, or to give testimony, as required, the commissioner or the commissioner's delegate may apply to the judge of the chancery court for the judicial district within which the person so summoned resides or is found for an attachment against that person as for a contempt. It is the duty of the chancellor to hear the application, and, if satisfactory proof is made, to issue an attachment, directed to some proper officer, for the arrest of such person, and upon such person being brought before the chancellor to proceed to a hearing of the case. Upon such hearing, the chancellor shall have the power to make such order as the chancellor deems proper, not inconsistent with the law for the punishment of contempt, to enforce obedience to the requirements of the summons and to punish such person for that person's default or disobedience.
(c) Oaths. Every officer or employee of the department designated by the commissioner for that purpose is authorized to administer such oaths or affirmations and to certify to such papers as may be necessary under this or any other title or any regulations made under this or any other title.
(a) When the commissioner determines that any person has failed to pay the correct amount of any tax administered by the commissioner under this or any other title, the commissioner shall promptly issue to such taxpayer a notice of proposed assessment, together with notice that the taxpayer shall have the right to an informal conference with the commissioner or the commissioner's designee as set forth in subsection (b) and that the proposed assessment shall become a final assessment as set forth herein. The notice shall also state that, upon an assessment becoming final, the taxpayer shall have the right, as set forth in § 67-1-1801, to file suit to challenge the final assessment and collection of the tax in the appropriate chancery court of this state within ninety (90) days from the date such assessment becomes final. The commissioner may authorize any division, unit, or official within the department to issue notices of proposed assessment on the commissioner's behalf.
(b) Any taxpayer to whom a notice of proposed assessment is issued shall have the right to an informal conference with the commissioner or the commissioner's designee to discuss the proposed assessment and to present such matters as may be relevant to the proposed assessment; provided, that written request for such conference is made within thirty (30) days after the date of the notice of proposed assessment. If a timely request for a conference is made, the commissioner or the commissioner's designee shall set a time and place for the conference within ten (10) days from the date of the request and shall give the taxpayer written notice of the conference. Upon written request by the taxpayer, the commissioner or the commissioner's designee may grant, in the commissioner's or designee's discretion, a continuation of the conference in writing for a period of time reasonably necessary for the taxpayer to provide additional information or documentation relevant to the proposed assessment. A continuation may be granted either before or after the conference is held, and the conference shall not be deemed to be concluded until the expiration of any such period of continuation. Within ten (10) days after the conclusion of the conference, the commissioner or the commissioner's designee shall give the taxpayer written notification of the commissioner's decision. If the commissioner's decision does not result in an adjustment to the proposed assessment, the proposed assessment shall become a final assessment as of the date of such decision. If the commissioner's decision results in an adjustment to the proposed assessment, the commissioner shall issue to the taxpayer a written determination setting forth the amount of tax that is due, if any, and such amount shall be a final assessment.
(c) If the taxpayer does not request an informal conference within the time period prescribed in subsection (b), the proposed assessment shall become a final assessment on the thirty-first day after the date of the notice of proposed assessment. In addition, any taxpayer that has requested a conference as provided in subsection (b) may cancel the request, in writing, at any time before, during, or after such conference; in which case the proposed assessment shall become a final assessment on the date of the written notification by the taxpayer of such cancellation or on the thirty-first day after the date of the notice of proposed assessment, whichever is later.
(d) Except as provided in subsection (c), the taxpayer shall not be prejudiced in any manner by either seeking or failing to seek an informal conference. The informal conference shall not be considered to be an administrative remedy and shall not constitute a contested case subject to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. The commissioner shall not be prejudiced in any manner as a result of such conference, including any failure to issue a final assessment within the ten-day period prescribed in subsection (b); provided, however, that no interest shall accrue on any deficiency during the period beginning on the eleventh day after conclusion of the conference and ending upon issuance of the final assessment.
(e) The informal conference process shall have all of the following characteristics:
(1) Personnel conducting informal conferences shall exercise independent judgment with the objective of resolving disputed proposed assessments without litigation;
(2) Informal conferences shall be conducted in an informal manner either by telephone or in person, at the taxpayer's option;
(3) The taxpayer may participate in an informal conference without representation; may be represented by an officer, employee, partner, or member of the taxpayer; or may be represented by a third party of the taxpayer's choice;
(4) Informal conference personnel shall make determinations regarding individual issues based on the facts and the law;
(5) Informal conference personnel shall consider arguments as to the applicability of the tax laws and any new evidence presented; provided, that if the new evidence is substantial and should have been presented at the time of audit, the informal conference personnel may request the audit division to examine the evidence and to make a recommendation as to the effect of the evidence on the relevant issue;
(6) The taxpayer shall have the right to bring witnesses to an in-person conference;
(7) Informal conference personnel shall not engage in ex parte communications with audit division personnel regarding the issue under review; provided, however, that informal conference personnel may, on an ex parte basis, ask questions that involve ministerial, administrative, or procedural matters and that do not address the substance of the issues or the positions taken in the audit;
(8) Informal conference decisions shall not be considered as precedent; and
(9) Informal conference personnel may recommend to the commissioner that the department compromise a proposed assessment in accordance with § 67-1-102(b)(8).
(f) When an assessment becomes final by operation of subsection (b) or (c), the taxpayer shall have the rights and remedies provided in part 18 of this chapter.
(g) The commissioner or the commissioner's designee, in such person's discretion, may hold an informal conference with a taxpayer to discuss an assessment that has become final by operation of subsection (c) or to discuss the denial or deemed denial of a claim for refund under § 67-1-1802. Any such conference shall not toll any period of limitation or otherwise affect any remedy provided in part 18 of this chapter.
(h) The commissioner may publish or otherwise publicize guidance to taxpayers, practitioners, and departmental personnel resulting from conference decisions; provided, however, that nothing in this subsection (h) shall be construed as authorizing the disclosure of return or tax information as defined in § 67-1-1701 and provided further that no conference decision shall be referenced or cited as:
(1) Precedence in any instance; or
(2) Guidance unless such guidance has been published or publicized as provided in this subsection (h).
The commissioner is authorized to prescribe all rules and regulations necessary for the administration of this chapter. Rules and regulations not inconsistent with this chapter shall have the force and effect of law when promulgated by the commissioner and approved by the attorney general and reporter. A copy of all such rules and regulations, in printed form, shall be furnished every collector of state taxes and shall be furnished to any other person upon request.
(a) It is a Class E felony for any person to assault any officer or employee of the department while performing duties as such officer or employee, or to assault any such officer or employee or a member of such officer's or employee's immediate family at any other time, if it is shown that such assault was by reason of the fact that such officer or employee had at some time performed an official duty as an officer or employee of the department with respect to any person. Any violation of this subsection (a) committed by any person with a pistol or other deadly weapon is a Class C felony. Each act done in violation of this subsection (a) is a separate offense.
(b) It is a Class E felony for any person to corruptly obstruct, delay, hinder, impede or intimidate, or to attempt to corruptly obstruct, delay, hinder, impede or intimidate, any officer or employee of the department from performing the officer's or employee's duty while acting in an official capacity under this part or any other laws of this state. It is also a Class E felony for any person in any other way to corruptly obstruct, delay, hinder or impede the administration of this part or any other revenue laws of this state. Each act done in violation of this subsection (b) is a separate offense.
(c) It is a Class C misdemeanor for any person to rescue or cause to be rescued, either forcibly or by any unlawful manner, any property after it shall have been seized under this part or any other revenue laws of this state, or to attempt or endeavor so to do. Each act done in violation of this subsection (c) is a separate offense.
(d) It is a Class E felony for any person to delay, hamper, hinder, impede, obstruct or thwart the state of Tennessee in the collection of any of its lawful revenue, or to deprive the state of the realization of such revenue at the time it is lawfully entitled thereto by any artifice, design, false weight or measure, stratagem, or by the falsification of any record, report or return required by law. Each act done in violation of this subsection (d) is a separate offense.
(e) It is a Class E felony for any two (2) persons to conspire to delay, hamper, hinder, impede, obstruct or thwart the state of Tennessee in the collection of any of its lawful revenue, or to deprive the state of the realization of such revenue at the time it is lawfully entitled thereto by any artifice, design, false weight or measure, stratagem, or by the falsification of any record, report or return required by law. Each act done in violation of this subsection (e) is a separate offense.
(f) It is a Class E felony for any person to falsely, corruptly, or knowingly misrepresent any material statement of fact while testifying under oath as a witness at any hearing held by the commissioner or the commissioner's delegate while acting in an official capacity under this part or any other laws of this state. Each act done in violation of this subsection (f) is a separate offense.
(g) It is a Class E felony for any person willfully to attempt in any manner to evade or defeat any tax due the state of Tennessee; provided, that if use tax of less than five hundred dollars ($500) is involved, the offense is a Class A misdemeanor. Each act done in violation of this subsection (g) is a separate offense.
(a) Inspectors, agents, representatives or officers appointed by the commissioner shall be cloaked with and have the duty, power, and authority as sheriffs, police officers and other peace officers to enforce this part.
(b) Any duly authorized officer or employee of the department who has been specifically designated by the commissioner to enforce this part is authorized and empowered to go armed or carry a pistol while on active duty engaged in enforcing this part. Any such person is also authorized and empowered to execute search warrants and to do all acts incident to search warrants, in the same manner as search warrants may be executed by sheriffs, police officers and other peace officers.
(c)
(1) Any duly authorized agent or officer of the department of revenue who retires after twenty-five (25) years of honorable armed service shall be issued a retired commission card by the department, which shall identify the agent or officer and the fact that the agent or officer is retired. Cards issued under this subdivision (c)(1) shall bear the inscription, in print of equal or larger size than the rest of the printing on the card, the words “Not a handgun permit.” After twenty-five (25) years of honorable armed service by an authorized agent or officer of the department, the department shall authorize such agent or officer, upon retirement, to retain the agent or officer's service weapon and badge, in recognition of the agent or officer's many years of good and faithful public service.
(2) Any authorized agent or officer of the department, who is issued a retired commission card pursuant to this subsection (c) but who has not completed twenty-five (25) years of honorable armed service, may retain the agent or officer's service weapon and badge in recognition of the agent or officer's years of good and faithful public service; provided, that the agent or officer reimburses the department for the cost of the service weapon and badge.
(3) This subsection (c) shall be retroactive to include officers from the department of safety that were transferred to the department of revenue effective July 1, 2006.
When a taxpayer is engaged in business as a sole proprietor, a partnership, or as a corporation, and that taxpayer is delinquent in paying a liability to the state for any tax or fee, then the commissioner or the commissioner's designee may permit the business taxpayer to continue in operation in order to pay to the state any tax or fee owed to the state. Such an arrangement shall be pursuant to rules and regulations promulgated by the commissioner. The commissioner or the commissioner's designee may permit such continued operation of a business, unless such designee finds there is a danger of the taxpayer doing any act to prejudice or render wholly or partly ineffectual the collection of the tax or fee due to the state.
(a) Any person required to collect, truthfully account for, and pay over any tax collected from customers of any taxpayer, who willfully fails to truthfully account for and pay over any such tax collected, or who willfully attempts in any manner to evade or defeat any such tax or the payment of those taxes, shall, in addition to other penalties provided by law, be liable for the total amount of the tax evaded, or not accounted for and paid over, along with penalties and interest.
(b) As used in this section:
(1) “Person” includes an officer or employee of a corporation, who, as such officer or employee, is under a duty to perform the act with respect to which the violation occurs; and
(2) “Willfully” is limited to material and informed participation in the diversion of such collected funds to a source other than to the state.
(c) The liability imposed by this section shall be collected as otherwise provided in this chapter.
(a) When assets are conveyed or obligations are created by a person owing taxes to the state, on or after the date any such taxes are incurred, and such conveyance of assets or creation of obligations is in violation of title 66, chapter 3, then the commissioner may proceed to collect such tax debt from the transferee, pursuant to this part, in the same manner as the commissioner otherwise could have collected such debt from the transferor.
(b) The liability of any such transferee shall be limited to the fair market value of the assets conveyed at the time of the transfer from the original taxpayer or the amount of any such obligation at the time the obligation is created.
(a) The commissioner may contract with any debt collection agency or attorney to collect unpaid taxes, licenses, fees and/or interest and penalty, or any other amount otherwise collectible by the commissioner.
(b) Any amounts collected pursuant to the contract shall be remitted to the state of Tennessee; provided, that the contract may provide for amounts to be received by the contractor as compensation for collection services. The amount of such compensation shall be added to the unpaid amount due from the taxpayer and shall be collectible in the same manner as taxes under this part.
(c) The commissioner shall require a bond from any person contracting under this section in an amount not in excess of one hundred thousand dollars ($100,000) guaranteeing compliance with the terms of the contract and all applicable laws.
(d) All persons seeking to contract under this section shall demonstrate, to the satisfaction of the commissioner, their good moral character and ability to perform effectively the terms of the contract. In addition to the specific requirements of this section, the commissioner may impose additional requirements tending to ensure the good moral character and effective performance of persons contracting under this section.
(e) This section shall only apply after the department has completed all administrative notices and actions under this part and the taxpayer has exhausted or not exercised the taxpayer's rights under part 18 of this chapter.
(a) Locally Collected Privilege Taxes. All state, county or municipal privilege taxes, including, but not limited to, business, litigation, real estate transfer and mortgage taxes collected by the state or by local officials for the benefit of cities, counties or the state, shall be barred, and any lien for such taxes shall be cancelled and extinguished, unless the liens are collected or suits for the collection shall have been instituted within six (6) years from January 1 of the year for which such taxes accrued.
(b) State Taxes Requiring the Filing of Returns — Assessment. Notwithstanding subsection (a), the amount of any tax imposed under any title, in which the filing of a return is required by the state, shall be assessed within three (3) years from December 31 of the year in which the return was filed, and no levy or other proceeding to enforce the collection of such tax without assessment shall be made or begun after expiration of such period; provided, that:
(1) In the case of a failure to file a return, the tax may be assessed or a levy or other proceeding to enforce the collection of such tax may be begun, with or without assessment, at any time;
(2) In the case of a false or fraudulent return with the intent to evade the tax, the tax may be assessed or a levy or other proceeding to enforce collection of such tax may be begun, with or without assessment, at any time;
(3) In the case of a redetermination of net income by the internal revenue service resulting in a taxpayer owing the state additional franchise or excise tax, the statutory period for the assessment of additional franchise or excise tax resulting from such revision shall not expire prior to the expiration of two (2) years from the date the commissioner or the commissioner's delegate is notified in writing by the taxpayer of such revision;
(4) In the case of a revision of any federal estate tax resulting from an examination by the internal revenue service that results in an estate owing the state additional estate or inheritance tax, the statutory period for the assessment of additional estate or inheritance tax resulting from such revision shall not expire prior to the expiration of two (2) years from the date the commissioner or the commissioner's delegate is notified in writing by the taxpayer of such revisions; and
(5) In the case of an agreement in writing entered into by the commissioner or the commissioner's delegate and the taxpayer within the time prescribed in this subsection (b) for assessment, consenting to an assessment after such time, the tax may be assessed or a levy or other proceeding to enforce collection of such tax may be made or begun with or without assessment at any time within the agreed upon period. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the previously agreed upon period.
(c) State Taxes Requiring the Filing of Returns — Collection. The amount of any tax assessed as prescribed by subsection (b) may be collected within the period of limitation provided in § 67-1-1429.
(d) Nonapplicable to ad valorem taxes. Nothing in this section shall apply to the collection of ad valorem taxes assessed against real or personal property by any county or municipality in this state.
(e) For purposes of this section, the term “assessed” or “assessment” shall be deemed to include any notice of proposed assessment issued by the commissioner or any other authorized person under § 67-1-1438, and the time periods set forth in subsection (b) are met if the commissioner issues a notice of proposed assessment within the period of time prescribed for an assessment.
It is the duty of the court in which proceedings concerning the collection of taxes may be brought, where the collection of taxes shall be claimed to be barred under § 67-1-1501, when this statute is pleaded, and the truth of the plea appears to the satisfaction of the court, to dismiss the cause, and order that the officer having the respective tax books in charge, enter on the tax books, opposite the name of the taxpayer, a memorandum of the judgment of the court.
Commissions shall not be allowed any collecting officer for collecting and paying over any public money, unless the officer makes settlement and payment as required by law.
(a) For any neglect or refusal to settle the collector's accounts, the commissioner and county mayor shall proceed against the collector and the collector's sureties, by motion, which shall not be abated, quashed, or delayed by any want of form or informality in prosecuting the accounts.
(b) Any officer concerned in the collection of revenue who has failed to collect, make returns or settlement, or pay over moneys of the state received by such officer, at the time and in the manner required by law, may be proceeded against summarily, on motion, in the circuit court, by the proper law officer of the state, pursuant to the instructions of the commissioner.
On receipt of the commissioner's statement, under the commissioner's official seal, of the sum claimed by the state against the delinquent, in cases in which a statement can be made out, or of the delinquent's official bond, accompanied by the commissioner's instructions, the district attorney general or county auditor shall move the court for judgment against the delinquent.
If the motion is made at a term requiring notice, and the notice is served five (5) days before the sitting of the court, the cause shall stand for trial at the first term.
The statement of the commissioner of the amount due the state from any delinquent shall be prima facie evidence of such amount and a copy of the delinquent's bond, from the commissioner's office, shall be received as evidence of the facts appearing on its face, unless, for sufficient reason, suggested on oath, the court require the production of the original.
The court shall render judgment against the delinquent and the delinquent's sureties for the amount appearing due from the statement of the commissioner, or for the penalty of the bond, where there is no statement.
If there be no statement of the commissioner, a judgment nisi shall be rendered for the penalty of the bond, and the defendant may have an issue made up to prove the amount due, and judgment final shall be given for such amount.
If the delinquent, or either of the delinquent's sureties, has died before the motion is made, the court shall give judgment against the sureties alone, in case of the death of the principal, or against the principal and surviving sureties on the bond, in case of the death of either of the sureties.
In taking judgment against a delinquent officer, interest at the rate of six percent (6%) on the amount that the delinquent officer has failed to pay over shall be added, and twelve and one-half percent (12.5%) damages on the delinquency.
Where a judgment has been obtained against a delinquent officer, all bona fide claims due the delinquent officer, properly authenticated, shall be allowed by the commissioner upon settlement of the judgment.
No district attorney general, either before or after suit is brought or judgment rendered, shall receive any money due the state. The clerk of the circuit court alone shall, for the clerk's county, receive moneys due the state from delinquent revenue collectors.
The clerk of the circuit court, immediately after receiving any money due to the state from delinquent collectors of revenue, shall report the amount, and from whom and when received, and immediately deposit the money in the state treasury.
The clerk's commission upon all moneys received by the clerk from delinquent collectors, and reported to the commissioner and paid into the state treasury, shall be six percent (6%).
Any and all officers entrusted with the collection and disbursement of public funds or revenues violating this part, parts 7, 10 or 15 of this chapter, chapter 5, parts 4, 18, 19 or 20 of this title, or § 67-1-107, § 67-5-301, § 67-5-302, § 67-5-306, § 67-5-507 or § 67-5-513, upon whom no penalty has been imposed for so doing, commits a Class C misdemeanor, the fine portion of which shall be placed in the state treasury for the benefit of the public school fund.
Where such trustee or other officer, whose duty it is to collect any taxes under this part, part 7, 10 or 15 of this chapter, chapter 5, parts 4, 18, 19 or 20 of this title, or § 67-1-107, § 67-5-301, § 67-5-302, § 67-5-306, § 67-5-507 or § 67-5-513, fails to account for any and all taxes that the trustee or officer has collected to the proper officer, in addition to the penalty in § 67-1-1615, the trustee or officer shall be liable to a penalty of two percent (2%) per month on the taxes from the time the taxes should have been paid, which is in addition to the attorney's fees provided for in § 67-1-1619, none of which shall in any way be remitted after the matter is placed in the hands of the attorney; and the trustee or officer shall, in addition, forfeit the trustee's or officer's respective office.
(a) A motion or suit lies in favor of the state, county, or municipality against the trustee and sureties on the trustee's official bonds for any moneys, in the trustee's hands officially, not paid over or accounted for according to law or for failure to collect.
(b) No surety on the bond of any trustee or other officer shall be liable for any penalty or attorney's fees until after demand has been made on the surety or sureties, and the surety or sureties have failed or refused to perform the duties required by law of the surety's or sureties' principal, or have failed or refused to pay over the sums of money due from such trustee or other officer.
(c) Where a judgment has been obtained against any collector of revenue or other such officer, either alone or with a part of such collector's or officer's sureties, a similar motion may be made against the sureties against whom no judgment has been obtained, whether the suretyship appears in the same or another bond.
(d) The person moved against shall have five (5) days' notice of the motion; provided, that this applies only to cumulative bonds, or where two (2) or more bonds have been given to secure the same object, and only to bonds already executed.
(a) The motion or suit in favor of the state may be in the name of the state, and shall be brought by the county auditors or by the district attorney general of the district where it is instituted upon the request of the county auditors made upon direction of the commissioner and state treasurer.
(b) The motion or suit by the county may be brought in the name of the state, for the use of the county, by the district attorney general or by counsel employed for that purpose.
(c) A motion or suit in favor of the municipality may be in the name of the state for the use of such municipality by the mayor of the city or the city attorney.
In each case, the counsel making the motion and conducting the suit shall be allowed ten percent (10%) on the recovery as compensation as fixed by § 67-1-1620, to be added to and become a part of the judgment; provided, that no such attorney's fee shall be chargeable to any surety on the bond of any such trustee or other officer whose duty it is to collect taxes under this title, until after demand has been made on such surety or sureties, and the surety or sureties have failed or refused to perform the duties required by law of the surety's or sureties' principal, or have failed or refused to pay over the sums of money due from such trustee or other officer.
(a) The fees allowed to the counsel for the state shall be collected by the county auditor and reported and accounted for as provided in subsections (b) and (c).
(b) The fees allowed to the counsel or county auditor for the county shall be collected by the counsel or county auditor and reported to the county mayor.
(c) The fees allowed to the city attorney shall be collected by the city attorney and reported to the mayor of the city or other chief official.
(a) In case the county mayor refuses to make the motion or bring the suit, after the written request of any taxpayer to do so, then any taxpayer of the county may make such motion or bring suit in the name of the state, for the use of the county, and employ counsel to conduct the cause; provided, however, that before making such motion or bringing suit, the taxpayer shall obtain leave of the judge of the court in which the motion is to be made or the suit brought to do so. The taxpayer shall make such application in writing, stating fully the grounds for the application, of which application the county mayor shall have five (5) days' written notice, stating the time and place of application.
(b) The judge shall hear the application at chambers or in term time, and may adjudge the costs of the application against the applicant, against the county mayor, or against the county as the judge shall deem just, and the judge shall enter judgment upon the record of the judge's court accordingly.
No power shall exist, either in the court or in any other official, to release any officer charged with the collection of revenue or the officer's sureties from the payment of any revenue, penalties or fees for which the officer or the officer's sureties may be liable.
(a) The district attorney general or state agent may move the circuit court for judgment against the state treasurer, or other state officer, for any neglect, default, misprision, misfeasance, or malfeasance in office, for which such officer and the officer's sureties, or either of them, might be sued upon any bond or other obligation executed for the due and lawful discharge of the duties of the officer's office.
(b) The motion shall be in writing, shall be signed by the district attorney general or state agent and shall be in the name of the state.
(c) A copy of the motion left at the dwelling house of the defendant, or the defendant's last usual place of residence, or place of abode or place of doing business, five (5) days previous to the motion, shall be sufficient service of notice of the motion.
(d) The court shall hear and determine the case without any declaration, or the formality of regular pleadings, according to the right of the case, and give judgment against the officer and the officer's sureties, and award execution as effectually as may be done by regular suit at law.
(a) Whenever the commissioner has reason to believe that any county clerk or the county clerk's agent or employee has failed, neglected or refused to perform any duty enjoined upon the county clerk by law relative to the collection, accounting for or paying over of any state revenue with the collection of which the county clerk is charged by law, the commissioner shall so notify the comptroller of the treasury and request in writing that an audit be made of such clerk's accounts, whereupon the comptroller of the treasury shall cause such audit to proceed within thirty (30) days.
(b) When any audit made by the comptroller of the treasury, whether under this section or otherwise, shall reveal willful failure upon the part of a county clerk to collect lawful state revenue, or to account for or pay over such revenue within the time allowed by law, the comptroller of the treasury shall certify such fact to the commissioner. Thereupon, the commissioner may issue to such clerk a citation by registered mail to appear within ten (10) days before the commissioner and show cause why the county clerk should not be relieved of the duties of collecting, reporting and paying over of such revenue, and all emoluments flowing from those duties.
(c) The commissioner is empowered to compel the appearance of witnesses and their testimony, and all parties to such proceeding shall have the right to have issued subpoenas for that purpose. All testimony and exhibits shall be preserved. Witnesses shall be allowed the same fees for attendance and travel as are allowed for witnesses before the circuit court. The commissioner shall provide a transcript of the proceedings before the commissioner in such cases.
(d)
(1) In the event that it is determined by the commissioner that a county clerk has willfully failed to collect, account for or pay over any such revenue, the commissioner may issue an order divesting such clerk of any or all duties respecting the handling of such revenue during such time as the office of county clerk may be held by such person, together with all emoluments appertaining to the office of county clerk. A copy of such order shall be posted in a conspicuous place in the courthouse of the county served by such clerk, and published for four (4) consecutive weeks in a newspaper of general circulation in such county.
(2) Such order of the commissioner shall be reviewable de novo within ten (10) days upon a petition for statutory certiorari addressed to the chancery court of the county where such county clerk resides, and shall not be superseded pending judicial review.
(3) Upon delivery of such order, the clerk shall immediately deliver to the commissioner or the commissioner's agent all state property, moneys, records, reports, forms and the like in the clerk's possession. Failure to do so is a Class C misdemeanor. Each day of such refusal is a separate offense.
(e) Following such order, the commissioner shall proceed through the commissioner's own agents and employees to collect state revenues formerly collected by the county clerk, to issue licenses, registrations and the like, and to be solely accountable therefor, as in the case of revenues collectible solely by the commissioner. All statutory fees and emoluments ordinarily inuring to the clerk shall be retained by the commissioner as expendable receipts and used to defray the expenses of collecting state revenues ordinarily collectible by county clerks, and providing public services incidental thereto.
(1) Any tax collector who willfully fails or refuses to pay into the state treasury the revenue that the tax collector has collected commits a Class E felony.
(2) It is the duty of the district attorney general of the district in which such defaulting revenue collector may reside to prosecute such collector for such offense.
(3) Such tax collector shall be imprisoned in the state penitentiary for a period of not less than five (5) nor more than twenty (20) years.
(b) “Tax collector,” as used in this section, includes and embraces all persons entrusted with the collection of the public revenue.
When the collector has duly accounted with the commissioner or county mayor for the full amount of the year's revenue, and paid it into the treasury, without obtaining a credit for insolvencies or deficiencies of payment, and the collector afterwards, in the manner and within the time prescribed by law, procures the proper evidence to authorize the commissioner or county mayor to credit the collector with the evidence, such officers shall respectively issue to the collector a warrant for the amount of such insolvencies or deficiencies of payment.
Any tax collector who has failed to collect any tax, but who has paid the tax to the state, county, or municipality to which the tax was due and payable, shall, in addition to the remedies provided by law, have a right to sue a defaulting taxpayer for the amount of the tax, as upon an account for money paid to the collector's use, and recover judgment for the tax, together with six percent (6%) interest per annum on the judgment for the time the tax should have been paid; provided, that the suit is brought within one (1) year after the collector has paid the tax.
Revenue collectors whose terms of office have expired, and whose successors have been elected, and who have not collected the taxes due for the time during which they held such office, shall, whenever they have paid into the treasury the amount charged against them on account of state and county revenue, have the same privileges, and be subject to the same laws, in the collection of the uncollected taxes, that are applicable to other revenue collectors.
(a) If a collector leaves the state without accounting for the county and state taxes, whereby the collector's sureties become liable for the taxes, or dies shortly before or during the time appointed for the collection of public taxes, so that a successor cannot be appointed in time to collect the taxes, it is lawful for the sureties of such collector to go before the county legislative body of the county for which their principal was elected, and prove to the court the existence of such absence or death of their principal. It shall then be the duty of the county legislative body to make a record of such proof, and upon it to make an order authorizing the sureties of such dead or absent collector to collect all arrearages of taxes not collected by their principal, and that it was the principal's duty to collect. Such order, when made, shall be made ample authority for such sureties to collect all such arrearages of taxes; and for this purpose the order shall vest them with all rights and powers to distrain and sell the property, whether real or personal, of those in arrears for taxes, the same as their principal could have done, if the principal had not been absent or died; and they shall have all the powers, authorities, privileges, and emoluments in and for the receipt and collection of the public taxes that the absent or deceased collector possessed and enjoyed.
(b) In case of such death or absence, as is contemplated in subsection (a), it shall and may be competent for the sureties of such dead or absent principal, or, in case of the death of any of the sureties, then their representatives, to go before the county legislative body and agree for any one (1) of such sureties to be appointed to collect such arrearages of taxes, and upon such agreement, it shall be competent for the county legislative body to appoint such surety so agreed upon to collect such arrearages of taxes, and a record shall be made of such agreement and choice, which appointment shall be as ample power to that surety as if all were authorized to collect them; but nothing in subsection (a) or this subsection (b) shall have the effect to release any of such sureties or their representatives from liability as such.
(c) If any person liable to pay such taxes fails to pay them to such designated surety, they may make distress and sale for such arrears in the same manner as the collector could have done. But no such distress or sale shall be made until public notice be first given in the manner prescribed in former §§ 67-5-1801 and 67-5-2005.
(d) The sureties of such defaulting collectors, or the authorized agents of such sureties, in all cases where they have paid the amount charged against such defaulting collectors, may sue for the collection of such delinquent taxes in the name of the state for their use, and in all cases where they have not paid, but have become liable for, such uncollected revenue, they may sue in their names, or the names of their duly authorized agents, for the use of the state, county, or municipality, to enforce the collection of such uncollected revenue or any revenues due the state, county, or municipality for which they, in any way, may have become liable.
(e) When a collector is deprived of the power of office, and suspended from acting as collector, on account of the collector's failure or refusal to give sureties in place of sureties discharged, the sureties may receive and collect all taxes not already paid to their principal that the principal was bound to collect; and, for such purpose, they shall have all the powers, authorities, privileges and emoluments that belong officially to the collector so suspended.
(f) Sureties, or the duly authorized agents of sureties of revenue collectors whose terms of office have expired, and whose successors in office have been elected, or, where two (2) years or more have elapsed after the expiration of the terms of office of such collectors, leaving uncollected taxes due the state, county, or municipality for the time during which such trustees held such office, whenever the trustees have paid into the treasury the amount charged against such collectors, on account of the state, county, or municipal revenue, or have become liable for the amount because of the collector's default, shall have the same privileges and rights in enforcing the collection of such uncollected revenue that are applicable by law to revenue collectors.
As used in this part, unless the context otherwise requires:
(1) “Commissioner” means the commissioner of revenue;
(2) “Department” means the department of revenue;
(3) “Officer or employee” includes former officers and employees;
(4) “Person” means every individual, firm, association, joint-stock company, syndicate, partnership, corporation, or state or federal agency;
(5) “Return” means any tax or information return, declaration of estimated tax, claim for refund, or petition for waiver of penalty required by, or provided for, or permitted under, any law, that is filed with or submitted to the commissioner by, on behalf of, or with respect to, any person, and any amendment or supplement thereto, including supporting schedules, attachments, or lists which are supplemental to, or part of, any return so filed or submitted;
(6) “Tax administration” means the administration, management, conduct, direction, and supervision of the execution and application of the state tax laws, rules, or related statutes or rules and reciprocity agreements with the several states or federal government to which the state of Tennessee is a party. “Tax administration” also means the development and formulation of state tax policy relating to existing or proposed tax laws, related statutes and reciprocity agreements and includes assessments, collection, enforcement, litigation, publication, and statistical gathering functions under such laws, statutes, rules or reciprocity agreements;
(7) “Tax administration information” means criteria or standards used or to be used for the selection of returns or persons for audit or examination, or data used or to be used for determining such criteria or standards; audit procedures; and any other information relating to tax administration;
(8) “Tax information” means a taxpayer's identity, the nature, source, or amount of the taxpayer's income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax collected, deficiencies, overassessments, or tax payments, whether the taxpayer's return was, is being, or will be, examined or subject to other investigation or processing, or any other data, received by, recorded by, prepared by, furnished to, or collected by, the commissioner with respect to a return or with respect to the determination of the existence, or possible existence, of liability, or the amount of the liability, of any person for any tax, penalty, interest, fine, forfeiture, or other penalty, imposition or offense, administered by or collected by the commissioner, either directly or indirectly. “Tax information” does not include data in a form that cannot, either directly or indirectly, be associated with, or otherwise be used to identify, directly or indirectly, a particular taxpayer;
(9) “Taxpayer identity” means the name of a person subject to a tax collected or administered by the commissioner, the person's mailing address, the person's taxpayer identifying number or account number, or a combination thereof; and
(10) “Unit of local government” means any county enumerated in § 5-1-101, any incorporated municipality, or any consolidated unit of any such counties and municipalities.
(a) Notwithstanding any law to the contrary, returns, tax information and tax administration information shall be confidential and, except as authorized by this part, no officer or employee of the department or of any office of a district attorney general or any state or local law enforcement agency, and no other person, or officer or employee of the state, who has or had access to such information shall disclose any such information obtained by such officer or employee in any manner in connection with such officer's or employee's service as an officer or employee, or obtained pursuant to this part, or obtained otherwise.
(b) Notwithstanding any other law to the contrary, the confidentiality and disclosure of any record or document pertaining to a motor vehicle registration or motor vehicle title for which the department has responsibility under title 55, chapters 1-6, title 65, chapter 15, or any other applicable statute shall be controlled by title 55, chapter 25.
(c) This part does not apply to any record, document, or other information pertaining to a tax on the privilege of occupancy in a hotel imposed by a city, town, or county pursuant to an ordinance, resolution, or private act.
(a) The commissioner shall, subject to such requirements and conditions as may be prescribed by rules, disclose the return of any taxpayer, or tax information with respect to such taxpayer, to such person or persons as the taxpayer may designate in a written request for or consent to such disclosure, or to any other person at the taxpayer's request to the extent necessary to comply with a request for information or assistance made by the taxpayer to such other person. Tax information shall not, however, be disclosed to such person or persons if the commissioner determines that such disclosure would be seriously burdensome to tax administration.
(b)
(1) The return of a person shall, upon written request, be open to inspection by or disclosure to:
(A) In the case of the return of an individual, that individual;
(B) In the case of the return of a partnership, any person who was a member of such partnership during any part of the period covered by the return;
(C) In the case of the return of a corporation or a subsidiary of a corporation:
(i) Any person designated by resolution of its board of directors or other similar governing body;
(ii) Any officer or employee of such corporation upon written request signed by any principal officer and attested to by the secretary or other appropriate officer; or
(iii) If the corporation has been dissolved, any person authorized by applicable state law to act for the corporation or any person who the commissioner finds to have a material interest that will be affected by information contained in the return;
(D) In the case of the return of an estate, the administrator, executor, or trustee of such estate; and
(E) In the case of the return of a trust, the trustee or trustees, jointly or separately.
(2) If an individual described in subdivision (b)(1) is legally incompetent, the applicable return shall, upon written request, be open to inspection by or disclosure to the guardian of the individual's estate.
(3) The return of a decedent shall, upon written request, be open to inspection by or disclosure to an administrator, executor, trustee or beneficiary of the decedent's estate. However, in order to obtain the return, a beneficiary must submit a sworn affidavit stating that: the affiant was a beneficiary of the estate who received a distribution of assets from the estate in kind; the affiant needs the return to accurately determine the federal income tax basis of such assets; and the affiant has requested the return from the personal representative who could not or would not provide it.
(4) If substantially all of the property of the person with respect to whom the return is filed is in the hands of a trustee in bankruptcy or receiver, such person's return or returns for prior years, upon written request, shall be open to inspection by or disclosure to such trustee or receiver, but only if the commissioner finds that such trustee or receiver, in the trustee's or receiver's fiduciary capacity, has a material interest that will be affected by information contained in the return.
(5) Any return to which this subsection (b) applies shall, upon written request, also be open to inspection by or disclosure to the attorney in fact or at law duly authorized in writing by any of the persons described in subdivisions (b)(1)-(4), who are themselves entitled to the return, to inspect the return or receive the information on their behalf, subject to the conditions provided in subdivisions (b)(1)-(4).
(6) Tax information with respect to any taxpayer that may otherwise be open to inspection by or disclosure to any person authorized by this subsection (b) to inspect any return of such taxpayer shall not be disclosed if the commissioner determines that such disclosure would seriously impair tax administration.
(a) Returns and tax information shall, without written request, be open to inspection by or disclosure to officers and employees of the department whose official duties require such inspection or disclosure for tax administration purposes.
(b)
(1) A return or tax information may be disclosed in a federal or state judicial or administrative proceeding pertaining to tax administration, but only if:
(A) The taxpayer is a party to such proceeding;
(B) The treatment of an item reflected on such return is directly related to the resolution of an issue in the proceedings; or
(C) Such return or tax information directly relates to a transactional relationship between a person who is a party to the proceeding and the taxpayer that directly affects the resolution of an issue in the proceeding.
(2) Such return or tax information shall not be disclosed as provided in subsections (a) and (b) and in §§ 67-1-1705(a) and 67-1-1707(a), however, if the commissioner determines that such disclosure would identify a confidential informant or seriously impair a civil or criminal tax investigation.
(c) Returns and tax information may be disclosed to any person to the extent necessary in connection with the processing, storage, transmission, and reproduction of returns and tax information, and the programming, maintenance, repair, testing and procurement of equipment and software, for purposes of tax administration.
(d) Upon request in writing, returns and tax information may be disclosed to duly authorized officials of a unit of local government of this state for the purpose of ascertaining whether proper local taxes or the tax imposed by § 67-4-704 is being paid. Upon written request, tax information may also be disclosed to duly authorized officials of a unit of local government of this state to the extent necessary to ascertain whether allocations from state levied taxes are being distributed to the correct unit of local government; provided, that such information shall not include the taxpayer's returns, receipts, income, tax liability, tax payments, or other financial information. For purposes of ascertaining whether proper local severance taxes are being paid pursuant to chapter 7, part 2 of this title, “authorized officials of a unit of local government” means the county mayor or a member of the county governing body. No unit of local government nor any official or employee of a unit of local government who receives returns or tax information under this subsection (d) shall disclose such information to any person other than the person to whom it relates, except as otherwise may be authorized by law. Any official or employee of a unit of local government who has or has had, at any time, access to any return or tax information under this subsection (d) shall be subject to all of the penalties and restrictions applicable to an officer or employee of the state under § 67-1-1709.
(e) A unit of local government receiving tax information under subsection (d) may disclose to a contractor or consultant the name, address, and situs of one (1) or more taxpayers for the purpose of ascertaining whether allocations of state and local taxes are being distributed to the correct unit of local government. Such information shall not include the taxpayer's returns, receipts, income, tax liability, tax payments, or other financial information. No consultant or contractor of a unit of local government who receives tax information under this subsection (e) shall disclose such information to any other person. Any consultant or contractor of a unit of local government who has or has had, at any time, access to any tax information under this subsection (e) shall be subject to all the penalties and restrictions applicable to an officer or employee of the state under § 67-1-1709.
(f) Returns and tax information may be disclosed for the purposes of tax administration to either house of the general assembly, or to any committee or subcommittee of the general assembly, but only upon a lawfully executed subpoena being served on the commissioner who demands such returns or information.
(g) Returns and tax information shall be open to inspection by, and/or disclosure to, any person contracting for the collection of unpaid taxes under part 14 of this chapter. This disclosure is authorized only to the extent necessary for the collection of unpaid taxes by that person. Any person receiving returns and/or tax information under this section shall be subject to the confidentiality provisions, including penalties, provided by this part.
(h) Returns, tax information and tax administration information may, in the commissioner's discretion, be disclosed for the exclusive purpose of participating in the multistate tax commission joint audit program. Any person receiving returns, tax information or tax administration information under this subsection (h) shall be subject to the confidentiality provisions, including penalties, set out in this part; and the commissioner is authorized to take such actions as deemed necessary to ensure that any such persons receiving returns, tax information or tax administration information shall maintain the confidentiality provisions set out in this part.
(i) Tax information may, in such form and manner as prescribed by the commissioner, be disclosed to the extent reasonably necessary to facilitate accurate reporting by entities required to file duplicate information returns pursuant to § 67-6-411. Such tax information shall not be used by the recipient for any purpose other than producing and filing duplicate information returns pursuant to § 67-6-411. Any person who receives such tax information under this subsection (i) is prohibited from disclosing such information and shall be subject to the confidentiality provisions, including penalties, set out in this part. The commissioner is authorized to take such actions as deemed necessary to ensure that any persons receiving such tax information shall maintain the confidentiality provisions set out in this part.
(a) A return or tax information shall be open to inspection by or disclosure to the attorney general and reporter, and to any of the several district attorneys general, when officially engaged in, and solely for their use in, preparation for any proceeding, or investigation that may result in such a proceeding, before a grand jury or any court of law or equity in a civil or criminal matter involving tax administration, collection or prosecution for violation of the state tax laws, but only if:
(1) The taxpayer is or may be a party to such proceeding;
(2) The treatment of an item reflected on such return is or may be related to the resolution of an issue in the proceeding or investigation; or
(3) Such return or tax information relates or may relate to a transactional relationship between a person who is or may be a party to the proceeding and the taxpayer that affects, or may affect, the resolution of an issue in such proceeding or investigation.
(b) An officer or employee of the department may, in connection with the officer's or employee's official duties relating to an audit, collection activity, or civil or criminal tax investigation or the investigation of any offense or matter under the tax laws of this state, disclose tax information to the extent that such disclosure is necessary in obtaining information, that is not otherwise reasonably available, with respect to the correct determination of tax, liability for tax, or the amount to be collected. Such officer or employee may also disclose tax information when disclosure is required to assure compliance with the tax laws of this state through:
(1) The release of specific tax information; or
(2) Publishing of a bulletin or list identifying persons recognized by the department as qualified sellers, limited users, dealers, and distributors qualified to receive taxable substances, indicating the extent to which they are bonded, or listing similar categories of persons and kinds of data.
(c) Investigative records of the special investigations unit of the department relating to potential criminal prosecutions of persons for violation of the tax laws of this state are confidential and may not be disclosed to any person, notwithstanding any provision of this part to the contrary, except in the exercise of the discretion of the commissioner so as not to seriously impair tax administration.
(a) If a notice of lien has been filed pursuant to law, the amount of the outstanding obligation secured by such lien may be disclosed to any person or that person's agent who has a right in the property subject to such lien or intends to obtain a right in such property.
(b) If any taxpayer is required to submit a bond to secure the payment of any taxes that may be due to the department, the amount of the outstanding obligation of the taxpayer may be disclosed to any person who stands as surety on the bond for such taxpayer.
(1) Returns and tax information shall, without written request, be open to inspection by or disclosure to the comptroller of the treasury or the comptroller's designated representative for purposes of audit.
(2) Such disclosure shall only be applicable to state tax returns and state tax information.
(3) Disclosure of federal tax returns and federal tax information may be made if permitted by federal law or any prohibition of disclosure is waived by the appropriate federal agency.
(b) A return or tax information may be disclosed to a competent authority of another state or the federal government that agrees to disclose returns or tax information to this state.
(c) Upon request in writing, the commissioner may, in the commissioner's discretion, furnish tax information to officers and employees of an agency of this state or of the federal government engaged in tax or economic analysis, if such tax information is relevant to the functions and duties of the requesting agency; but no agency, or officer or employee of the agency, who receives tax information under this subsection (c) shall disclose such information to any person other than the person to whom it relates, except in a form that cannot be associated with, or otherwise identify, directly or indirectly, a particular taxpayer.
(d) Returns and tax information may be disclosed to any person to whom the department is authorized to provide such returns and information by any other law.
(e) Nothing in this part shall restrict the disclosure of tax returns or tax information by a private firm engaged in the business of tax return preparation; provided, that such disclosure is in connection with the purchase or sale of a firm engaged in the business of tax return preparation or in connection with the review of such a firm by an affiliated firm or in connection with the offering of services to individual taxpayers.
(f) This part does not restrict the public disclosure of the name and address of an owner of a business tax license under chapter 4, part 7 of this title, or any information on the license or license application pertaining to whether the owner is a veteran or a member of a minority group based on race, ethnicity, religion, sex, or national origin.
(g) Upon request in writing, the commissioner may, in the commissioner's discretion, furnish tax information to officers or employees of an agency of this state, if such tax information is relevant to the functions and duties of the requesting agency. No agency or employee of the agency who receives tax information under this subsection (g) shall disclose such information to any person other than the person to whom it relates, except as otherwise may be authorized by law.
(h) The commissioner may provide tax information to an official of any state agency or other state entity, for the purpose of ensuring compliance with title 12, chapter 4, part 1, requiring that persons contracting with the state or other state entities register themselves and their affiliates to collect and remit taxes. No agency or employee of the agency who receives tax information under this subsection (h) shall disclose such information to any person other than the person to whom it relates, except as otherwise may be authorized by law.
(i) A return or tax information may be disclosed in response to a subpoena that is duly authorized and properly served under the Federal Rules of Criminal Procedure or the Tennessee Rules of Criminal Procedure.
(j) The commissioner shall, without written request, provide tax information to officers or employees of a claimant as defined in § 67-1-1808, if such tax information is necessary to accomplish and effectuate the purposes of § 67-1-1808. No officer or employee who receives tax information under this subsection (j) shall disclose such information to any person other than the person to whom it relates, except as otherwise may be authorized by law.
(k) The commissioner may, in the commissioner's discretion, disclose tax information to a unit of local government of this state for purposes of effectuating distributions of tax revenues under the Border Region Retail Tourism Development District Act, compiled in title 7, chapter 40. No unit of local government that receives tax information under this subsection (k) shall disclose the information to any person. However, nothing in this part shall prohibit the unit of local government from making payment or reimbursement to a private party out of distributions received under the Border Region Retail Tourism Development District Act, even if the funds are derived from sales and use taxes collected from a single parcel of property, and such payment or reimbursement shall not be a violation of this part.
(a) Requests for the inspection or disclosure of a return or tax information and such inspection or disclosure shall be made in such manner and at such time and place as shall be prescribed by the commissioner.
(b) A reproduction or certified reproduction of a return shall, upon written request, be furnished to any person to whom disclosure or inspection of such return is authorized by law. A reasonable fee may be prescribed by the commissioner for furnishing such reproduction or certified reproduction.
(c) Tax information disclosed to any person under the provisions of law may be provided in the form of written documents, reproductions of such documents, films or photo impressions, or electronically produced tapes, discs or records, or by any other mode or means which the commissioner determines is necessary or appropriate. A reasonable fee may be prescribed by the commissioner for furnishing such tax information.
(d) Any reproduction of any return, document or other material made in accordance with this section shall have the same legal status as the original, and any such reproduction shall, if properly authenticated, be admissible in evidence in any judicial or administrative proceeding as if it were the original, whether or not the original is in existence.
(a) It is a Class E felony for any person who has, or had at any time, access to any return or tax information to disclose to any person, except as authorized by law, any such return or tax information. If such offense is committed by any officer or employee of the state or any other officer or employee described in § 67-1-1702(a), the officer or employee shall, in addition to any other punishment, be dismissed from office or discharged from employment upon conviction for such offense.
(b) It is a Class E felony for any person to offer any item of material value in exchange for any return or tax information and to receive as a result of such solicitation any such return or tax information.
(c) It is a Class E felony for any employee of the department willfully to inspect any return or tax information, except when the employee has a good faith and objectively reasonable basis for believing such inspection is in furtherance of the employee's duties or responsibilities.
(a) In determining taxpayer liability of any professional practitioner licensed by this state, the commissioner shall have no authority to obtain access to legally privileged information, as provided for in § 23-3-105 or to confidential client information, as provided for in statute or professional rules, including the rules of the Tennessee supreme court. Confidential client information includes, but is not limited to, the identity of a client, the nature of the matter for which representation was sought, or any information obtained by counsel in the course of the client's representation.
(b) When the provisions of subsection (a) are asserted, the disclosure of any information shall be made only after a court order compelling disclosure of such information is final. In an action to compel such disclosure, the client affected by the disclosure has the right to intervene anonymously; any examination of the information shall be conducted in camera; and the commissioner shall have the burden of proof to show, by clear and convincing evidence, that the information sought is not privileged or confidential client information.
The commissioner is authorized to disclose tax administration information, other than returns and tax information, if the commissioner determines that such disclosure is in the best interests of the state; provided, that no law shall be construed to require disclosure of criteria or standards used or to be used for the selection of returns or persons for audit or examination, or data used or to be used for determining such criteria or standards, if the commissioner determines that such disclosure will impair assessment, collection, or enforcement under state tax laws.
(a) A certified service provider and the department shall comply with the privacy policy of the Streamlined Sales and Use Tax Agreement, and the policy is enforceable by the attorney general and reporter.
(b) Returns and tax information of a Model 1 seller may be disclosed to the seller's certified service provider.
(1) In all cases in which any officer, charged by law with the authority to assess taxes that are collected or administered by the commissioner of revenue, shall finally assess a tax alleged or claimed to be due, if the taxpayer against whom the final assessment is made believes the final assessment to be unjust, illegal or incorrect, the taxpayer's remedies shall be as follows:
(A) The taxpayer may pay the tax and file a claim for refund of the tax and proceed as provided in this part; or
(B) The taxpayer may file suit against the commissioner in chancery court in the appropriate county in this state, challenging all or any portion of the final assessment of such tax, including any interest and penalty associated with the tax. Until the earlier of the expiration of ninety (90) days after an assessment becomes final, or the filing of a suit by the taxpayer as provided in subsection (b), no levy as defined in § 67-1-1404 shall be made, begun or prosecuted by the commissioner. The commissioner may, however, initiate and pursue any other action to collect an assessed deficiency under part 14 of this chapter or otherwise, including, but not limited to, the filing of a notice of lien as provided in § 67-1-1403 and the collection of a jeopardy assessment.
(2) Subdivision (a)(1)(B) shall not apply to those cases where the final assessment is based on:
(A) Bad checks;
(B) Debit memos based on mathematical errors caused by the taxpayer's own figures; and
(C) Delinquent partial payment agreements.
(b) A suit challenging the final assessment of a tax or seeking a stay of collection of an inheritance or gift tax deficiency pending a final determination of a timely proceeding for review of an appraisal filed by the taxpayer before the appropriate board must be:
(1) Filed within ninety (90) days from the date the assessment becomes final, with a copy of the notice of proposed assessment issued pursuant to § 67-1-1438 attached to the notice as an exhibit; and
(2) Signed by the taxpayer under the penalties of perjury, affirming that the taxpayer or affiant believes that the final assessment, or the portion of the final assessment being challenged, is unjust, illegal or incorrect and that the suit is brought in good faith and not solely for the purpose of delay.
(c)
(1) A suit filed by a taxpayer under subsection (b) shall operate to continue the stay of collection of the tax, or portion of the tax challenged, as provided in subdivision (a)(1)(B), except as otherwise provided in subsection (d), until dismissal or final determination of the tax, if the taxpayer also files with the taxpayer's suit one (1) of the following:
(A) A corporate surety bond or an irrevocable letter of credit, in the form prescribed by regulations issued by the commissioner, issued by a qualified surety company or bank, in a principal amount equal to one hundred fifty percent (150%) of the amount of the final assessment or portion of the final assessment that is challenged by the suit;
(B) A pledge or collateral assignment of assets in an amount and form satisfactory to the commissioner as evidenced by the commissioner's written consent to the pledge or collateral assignment; or
(C)
(i) An affidavit executed by or on behalf of the taxpayer, which lists and describes with particularity:
(a) All of the taxpayer's assets, the respective fair market values and present location of those assets, all of the liabilities and the amount of the liabilities, and the person's or persons' address to whom such liability is owing, that are an encumbrance or lien against such assets; and
(b) All transfers and assignments of the taxpayer's assets, whether such transfer was by gift, as collateral security, or otherwise, within the one-year period preceding the date of the final assessment, together with a description of the asset, its value, and the name and address of the transferee or assignee of the asset, except those transfers or assignments that were bona fide, arm's length sales or pledges of noninventory assets of a value of less than one thousand dollars ($1,000), or sales from inventory occurring in the ordinary course of a taxpayer's trade or business, and for which the taxpayer received full and adequate consideration in money or money's worth; and
(ii) A certified copy of each notice of lien, in the form prescribed by regulations issued by the commissioner, required to be filed herein. A notice of lien in favor of the commissioner on all of the taxpayer's real property, wherever situated, shall be filed in the office of the secretary of state and in the office of the register of deeds in the county of the taxpayer's domicile or principal place of business in this state. A notice of lien in favor of the commissioner shall also be filed in other states, in the county in which the taxpayer's real estate is situated.
(2) For purposes of this subsection (c):
(A) In the case of a corporate taxpayer, no distribution to a shareholder of the corporation by way of a dividend, redemption, liquidation or partial liquidation, nor principal repayment of a debt by the corporate taxpayer to the shareholder shall be deemed as having been made for full and adequate consideration;
(B) A corporate surety company shall be qualified to issue a surety bond, if it is authorized by the commissioner of commerce and insurance to engage in the surety insurance business in this state, and a bank shall be qualified to issue its irrevocable letter of credit if it has been designated by the state treasurer as an authorized depository bank for the deposit of state funds, unless it has been determined by the commissioner to be not qualified for this purpose, based on reasonable standards uniformly applied;
(C) An asset of a taxpayer may include property assigned to the taxpayer for the limited purpose of having such asset pledged, collaterally assigned, or subjected to the lien in favor of the commissioner;
(D) A notice of lien filed as provided in subsection (b) constitutes a lien against taxpayer's property, including after-acquired property and replacement property, to the extent of the amount of the final assessment or portion of the final assessment challenged by the taxpayer's suit, including all penalties and interest associated with the final assessment or imposed by the court, and shall have priority over all subsequent liens filed and perfected against the taxpayer's property, and may be collected and enforced by the commissioner in the same manner as a judicial lien or judgment, or in accordance with part 14 of this chapter; and
(E) A notice of lien, whether filed by the commissioner under § 67-1-1403 or filed by the taxpayer under this subsection (c), against any inventory, stock in trade, or trade receivables of the taxpayer shall not operate to or be construed so as to preclude the sale of such inventory or stock in trade by the taxpayer to customers in the ordinary course of the taxpayer's trade or business, nor to prevent the taxpayer from using the proceeds from the sale of inventory or stock in trade to customers in the ordinary course of the taxpayer's trade or business, and the proceeds from collection of trade receivables for the ordinary and necessary conduct and continuation of the taxpayer's trade or business.
(d) If the taxpayer has filed a qualified corporate surety bond or bank irrevocable letter of credit in the amount equal to one hundred fifty percent (150%) of the amount of the final assessment or portion of the final assessment that is challenged by the suit, or has entered into a pledge or collateral assignment of assets in an amount and form satisfactory with the commissioner as evidenced by the commissioner's written consent to the pledge or collateral assignment, or has filed certified copies of notices of liens on all of the taxpayer's property, or on unencumbered property of the taxpayer located in this state equal in value to at least one hundred fifty percent (150%) of the amount of the final assessment, or the portion of the final assessment challenged by the suit, proceedings or actions for the collection of the assessed tax or challenged portion of the assessed tax, including an action to enforce the lien in favor of the commissioner under part 14 of this chapter, shall be stayed pending final determination of the suit; provided, that, unless the taxpayer has filed a qualified corporate surety bond or bank irrevocable letter of credit in the amount provided in this subsection (d), the commissioner shall not be prohibited or stayed from taking action to enforce or collect a jeopardy assessment as provided in §§ 67-1-1406 and 67-1-1431. In the event the suit is withdrawn or dismissed, or final judgment on the suit is rendered in favor of the commissioner as to all or any portion of the challenged assessment, the commissioner shall be entitled to collect the amount of the final assessment, interest accrued on the final assessment, and any penalty assessed against the taxpayer, by enforcement of the bond, the letter of credit, the pledge or collateral assignment of assets, or the lien.
(e) In the event the commissioner commences a jeopardy proceeding under §§ 67-1-1406 and 67-1-1431, a taxpayer who has filed suit under this section and who has filed a pledge or collateral assignment of assets in an amount and form acceptable and consented to by the commissioner, or has filed notices of lien on all of such taxpayer's property or on unencumbered property of the taxpayer located in this state, equal in value to at least one hundred fifty percent (150%) of the assessment or portion of the assessment challenged by the suit, shall have the right to seek a stay by the court of such jeopardy proceeding. The court shall not have jurisdiction to issue an ex parte stay or temporary restraining order. A stay or temporary order restraining such jeopardy proceeding may be issued by the court only after a hearing held upon not less than fifteen (15) nor more than thirty (30) days prior notice to the commissioner. At a hearing for stay or temporary order restraining jeopardy proceedings, the commissioner's basis for such proceeding shall be presumed to be correct, and the burden of proof shall be on the taxpayer to establish by clear and convincing evidence that the commissioner does not have a reasonable basis in fact for finding that collection of the tax is in jeopardy.
(f) If the taxpayer files an amendment to the taxpayer's complaint challenging the final assessment of additional taxes, for purposes of staying action for collection under subsection (d), such amended complaint shall be treated as an original complaint, and no stay of collection shall apply, unless or until an additional qualified corporate surety bond, bank letter of credit, pledge or collateral assignment of assets consented to by the commissioner is filed, or notices of lien are filed on all taxpayer's property or on additional property of the taxpayer located in the United States, to the extent required to equal or exceed one hundred fifty percent (150%) of the amount of additional assessment challenged. The filing of an amendment to a complaint in a pending suit challenging the final assessment of additional taxes shall be deemed to be the filing of a suit as provided in subsection (b).
(g) The commissioner may at any time file a motion with the court challenging the qualification, sufficiency, or validity and accuracy of any bond, letter of credit, affidavit, or notice of lien filed by a taxpayer. Such motion may also seek to increase the amount of any bond, letter of credit, pledge or collateral assignment of assets, or notice of lien, which shall be granted, if it reasonably appears to the court that the amount is not sufficient to protect the state adequately. The commissioner shall be entitled to discover any and all matters, not privileged, pursuant to the Rules of Civil Procedure. If a bond, letter of credit, or notice of lien is determined, after hearing, to be disqualified or insufficient to stay a levy or action to collect the final assessment, or portion of the final assessment challenged, such stay shall be lifted, unless made qualified or sufficient within the time, not to exceed ten (10) days, prescribed by the court. If the court, after hearing, determines that an affidavit filed by the taxpayer contains material omissions, misrepresentations, overvaluation of assets or understatement of liabilities, the court shall dismiss the taxpayer's suit with prejudice, unless the court also finds, from the preponderance of the evidence, that such omission, misrepresentation, overvaluation or understatement was not intentional and was not made for the purpose of misleading the commissioner or the court, or of concealing or disguising assets, transfer of assets, or the value of those assets.
(h) The commissioner shall be entitled, upon motion with notice to the transferee or assignee of a taxpayer's assets, to have the court set aside and order restored to the taxpayer for the benefit of the commissioner all transfers and assignments of the taxpayer's assets occurring subsequent to or within one (1) year preceding the filing of suit by the taxpayer challenging an assessment by the commissioner, except those transfers or assignments that were bona fide, arm's length sales or pledges of noninventory assets of a value of less than one thousand dollars ($1,000), or sales from inventory occurring in the ordinary course of the taxpayer's trade or business, and for which the taxpayer received full and adequate consideration in money or money's worth. The commissioner shall be entitled to discover any and all matters, not privileged, pursuant to the Rules of Civil Procedure. The court may order the restored assets sold and liquidated under the procedures established in part 14 of this chapter, and shall apply the net proceeds of the sale to the payment of all amounts assessed by the commissioner against the taxpayer, and shall return the balance of the proceeds, pro rata, to the person or persons from whom the assignment or transfer of such assets was set aside.
(i) To the extent of any amounts collected by or paid to the commissioner with respect to an assessment, or any portion of the assessment, challenged by suit by the taxpayer, whether such collection was pursuant to a jeopardy proceeding, by application of assets restored to the taxpayer pursuant to subsection (h), or otherwise, the suit shall proceed as a timely suit for refund of taxes paid, as if a timely claim for refund had been filed by the taxpayer and denied by the commissioner.
(j) Any notice of a proposed or final assessment issued by the department shall include notice that the taxpayer has the right to file suit in the appropriate chancery court of this state in accordance with this section to challenge the final assessment and collection of the tax within ninety (90) days from the date such assessment becomes final.
(A) The commissioner of revenue, with the approval of the attorney general and reporter, except as provided in subdivision (a)(4), is empowered and directed to refund to taxpayers all taxes collected or administered by the commissioner that are, on the date of payment, paid in error or paid against any statute, rule, regulation or clause of the constitution of this state or of the United States. Such refunds shall include, but not be limited to, credit carryovers generated after an audit review of returns, reports, or other documents filed by the taxpayer, including amendments to the returns, reports, or other documents. Such refunds do not, however, include credits generated by mechanical processing or mechanical mathematical verification processes. The commissioner is also authorized to automatically issue a credit or refund, without the necessity of the approval processes set out in this subsection (a), for the portion of estimated taxes paid in excess of the actual liability established by the initial and subsequently filed return for the tax period. The authority granted in this subdivision (a)(1)(A) extends only to taxes for which a claim is filed, with the commissioner under penalties of perjury, within three (3) years from December 31 of the year in which the payment was made. The claim must set forth each ground upon which a refund is claimed, the amount of such refund, the tax period, the tax type, and information reasonably sufficient to apprise the commissioner of the general basis for the claim. A refund requested on a franchise and excise tax return, or amended return, properly filed with the commissioner is deemed to comply with those requirements. The entire disputed amount of tax, penalty and interest must be paid before any claim for refund can be filed.
(B)
(i) Any taxpayer requesting a refund in the amount of two hundred dollars ($200) or more that is not eligible for automatic credit or refund pursuant to subdivision (a)(1)(A) shall complete and submit a written report of debts owed to a claimant as defined in § 67-1-1808 on a form prescribed by the commissioner to accompany the claim for refund. If a debt is reported and if the claim for refund is approved, any or all of the refund amount shall be subject to offset to recover the amount of such debt, subject to the requirements of § 67-1-1808. Any person who, with intent to deceive, provides false information on such report commits the Class A misdemeanor offense of perjury pursuant to § 39-16-702. Such report shall state whether or not such person owes or does not owe any of the following debts as of the date of the claim:
(a) State tax liabilities;
(b) Child support;
(c) Overpayment of unemployment compensation benefits;
(d) Overpayment of medical assistance benefits owed the bureau of TennCare;
(e) Student loan or other obligation due to the Tennessee student assistance corporation;
(f) Fees, costs or restitution owed to a clerk who serves a court of criminal jurisdiction;
(g) Costs of incarceration;
(h) Judgments or liens in favor of a state agency, department, commission, or bureau;
(i) All other debts owed to any other claimant.
(ii) Each of the debts in subdivision (a)(1)(B)(i) that are listed in the report shall be preceded by the words “Yes” and “No” and a taxpayer shall make a cross mark (X) or other similar mark opposite the debt the taxpayer owes or does not owe. If a taxpayer marks “Yes” for any such debt, the taxpayer shall attach documentation identifying the claimant to whom the debt is owed and the outstanding balance of the debt. The report shall clearly state in bold face type that a person who, with intent to deceive, provides false information on the report is guilty of the Class A misdemeanor offense of perjury. The report required by this subdivision (a)(1)(B) shall be made on a paper writing in substantially the following form:
(2) The commissioner is authorized to make refunds without a claim being filed if the commissioner is in possession of proper proof and facts that a refund is due within three (3) years from December 31 of the year in which the payment was made.
(3) The commissioner is authorized to refund excise taxes due a taxpayer because of a decrease in net income divulged by an examination by the internal revenue service; provided, that a claim is filed with the commissioner, supported by proper proof, within three (3) years from the date of such redetermination of net income by the internal revenue service.
(4) The commissioner is authorized to refund estate or inheritance taxes due a taxpayer because of a decrease in federal estate tax resulting from an examination by the internal revenue service; provided, that a claim is filed with the commissioner, supported by proper proof, within two (2) years from the date of such redetermination of the estate by the internal revenue service.
(5) The commissioner is authorized to refund, without the necessity of a claim having been filed, inheritance taxes due a taxpayer because of a decrease in inheritance tax resulting from an examination by the commissioner.
(6)
(A) The commissioner is authorized and empowered, in the commissioner's discretion, to designate subordinate officials in the department to approve, on the commissioner's behalf, claims for refunds in amounts of five thousand dollars ($5,000) or less. Only one (1) such subordinate official and one (1) alternate subordinate official shall be designated to approve any one (1) class of claims. The commissioner shall notify, in writing, the commissioner of finance and administration and the attorney general and reporter as to the names of any such subordinate officials so designated.
(B) The commissioner is also authorized and empowered, in the commissioner's discretion, to approve claims for refunds in amounts of more than five thousand dollars ($5,000) but not more than fifteen thousand dollars ($15,000). The commissioner is authorized and empowered to designate, in the commissioner's discretion, subordinate officials in the department to initially review claims for refund. Such subordinate official shall make a finding in regard to each claim recommending either approval or disapproval. This finding shall be reviewed by the legal office of the department of revenue, which shall make its own recommendation approving or disapproving the claim. Both these findings shall be submitted to the commissioner, or the commissioner's designated subordinate official, who shall make a final determination, either approving or disapproving the claim in the commissioner's or the commissioner's designated subordinate official's discretion, based on all information available to the commissioner or the commissioner's designated subordinate official. The findings of the designated subordinate official and legal office shall be advisory only and shall not be construed to limit the discretion of the commissioner in making refunds under this subsection (a). The commissioner is authorized and empowered to designate subordinate officials in the department to approve, on the commissioner's behalf, claims for refund under this subdivision (a)(6)(B).
(C) The commissioner is also authorized and empowered to approve claims for refunds in amounts of more than fifteen thousand dollars ($15,000); provided, that the attorney general and reporter may require that the refund of such claims or any class of such claims be subject to the attorney general and reporter's prior review and approval.
(7) A refund which is authorized solely by a final court adjudication shall not be made to any person who is not either a party to such action or a party to another similar action.
(8) In any case in which the statute of limitations on the assessment of tax is extended by agreement in writing pursuant to § 67-1-1501(b)(5), the periods specified in this subsection (a) which limit the ability of the commissioner to refund taxes may also be extended for an equivalent period of time by agreement in writing entered into by the commissioner or the commissioner's delegate and the taxpayer.
(b)
(1) All claims for refund filed pursuant to this section shall be finally determined within six (6) months following receipt of the claim. If the claim for refund is denied, the commissioner shall promptly notify the claimant of the denial and the claimant's right to file a suit for refund in the appropriate chancery court of this state within one (1) year from the date that the claim for refund was filed with the commissioner.
(2) If a claim is not determined within the six-month period following receipt by the commissioner of such claim, the claim shall be deemed to be denied for the purpose of filing suit in chancery court.
(c)
(1) A suit challenging the denial or deemed denial of a claim for refund shall be filed in the appropriate chancery court of this state within one (1) year from the date that the claim for refund was filed with the commissioner; provided, that a taxpayer and the commissioner or the commissioner's delegate may enter into an agreement in writing within one (1) year from the date the taxpayer filed a claim for refund in which the taxpayer and the commissioner or the commissioner's delegate consent to suit being filed in chancery court beyond the one-year period provided in this subdivision (c)(1) and that, in the case of an agreement, the taxpayer may file suit in the appropriate chancery court challenging the denial or deemed denial of a claim for refund within the agreed upon period.
(2) In a suit challenging the denial or deemed denial of a claim for refund, the chancery court shall conduct a de novo trial of the suit; provided, that the court shall have no jurisdiction in cases in which the issue is the existence, continued existence, or amount of a debt set off against a tax refund, or in which the issue is the validity of an assessment made pursuant to § 67-1-1808(i). The remedies established in § 67-1-1808 are a taxpayer's sole and exclusive remedies to challenge the existence, continued existence, or amount of a debt set off against a tax refund, or to challenge the validity of an assessment made pursuant to § 67-1-1808(i).
(3) The commissioner, by written notice promptly delivered to the taxpayer, may waive the requirement that the taxpayer file a claim for refund, in which case the taxpayer may file suit in the appropriate chancery court of this state for a refund within one (1) year following the date of such waiver by the commissioner, and such suit shall proceed in all respects, including for the purpose of determining the date from which interest thereon should be calculated, as if proper and timely claim for refund had been filed by the taxpayer, and either denied or not acted upon by the commissioner within the period specified herein.
(4) Notwithstanding this subsection (c), a suit challenging the denial or deemed denial of a claim for refund under § 67-4-2122 must be filed in the chancery court of Sumner County. The complaint must be signed by the taxpayer under the penalties of perjury, affirming that the taxpayer or affiant believes that the department's denial of the refund being challenged is unjust, illegal, or incorrect and that the suit is brought in good faith.
(d) This section is specifically made applicable to a refund arising from the application of § 67-6-507(e)(6). If a certified service provider, as defined in § 67-6-102, has assumed sales and use tax return filing responsibilities of the seller, the provider shall have the right to claim, on behalf of the seller, any bad debt allowance or refund available to the seller under § 67-6-507.
(e)
(1) As used in this section, “taxpayer” means:
(A) A dealer as defined in § 67-6-102 that remitted the sales or use taxes to the commissioner;
(B) A person that paid the sales or use taxes to a dealer that collected and remitted such taxes to the commissioner, if:
(i) The person requested a refund from the dealer on at least two (2) separate occasions and the dealer failed or declined to issue the refund; and
(ii) The dealer attests to the following under penalty of perjury on a form prescribed by the commissioner:
(a) The taxes were remitted to the department by the dealer, including the amount and the date remitted;
(b) The dealer has not claimed and will not claim a refund of such taxes;
(c) The dealer has not taken and will not take a credit for such taxes;
(d) The dealer's sales and use tax account number; and
(e) The local jurisdiction or jurisdictions for which any local sales tax included in the refund claim was collected and remitted; or
(C) A person that paid sales or use taxes to a dealer that collected and remitted such taxes to the commissioner, if:
(i) The person requested a refund from the dealer on at least two (2) separate occasions and the dealer failed or declined to issue the refund; and
(ii) The person reasonably attempted but was unable to obtain an attestation from the dealer as required under subdivision (e)(1)(B)(ii); provided, however, a refund shall not be issued to a taxpayer that files a claim for refund under this subdivision (e)(1)(C) unless the commissioner, in the commissioner's discretion, determines that sufficient information is reasonably available to verify that the taxes were remitted by the dealer to the department, that the dealer has not claimed a refund of such taxes, that the dealer has not taken a credit for such taxes, the dealer's sales and use tax account number, and the local jurisdiction or jurisdictions for which any local sales tax included in the refund claim was collected and remitted. For purposes of this subdivision (e)(1)(C)(ii), a purchaser who contacts the dealer in writing at least twice at least ninety (90) days prior to the expiration of the statute of limitations for requesting such refund is deemed to have made a reasonable attempt to obtain the dealer's attestation.
(2) For a taxpayer as defined in subdivision (e)(1)(B) or (e)(1)(C) to file a claim for refund under this subsection (e), the amount of the claim for refund to be filed by such taxpayer must exceed two thousand five hundred dollars ($2,500) per dealer.
(3) Any refund claimed by a taxpayer must otherwise meet the requirements of this section.
(4) Sales or use taxes that were collected from or passed on to customers by a taxpayer as defined in subdivision (e)(1)(A) shall not be refunded unless the taxpayer has refunded or credited the sales or use tax to its customers.
(a) Subject matter jurisdiction shall be, and the venue of suits filed pursuant to this part shall lie, in the chancery court in either Davidson County or in the county in Tennessee of the taxpayer's domicile or in the county in which the taxpayer has the taxpayer's principal place of business in Tennessee.
(b) If it is determined that the taxes for which a claim for refund was made pursuant to § 67-1-1802, or as to which suit proceeded as a timely suit for refund pursuant to § 67-1-1801(i), were not due from the taxpayer to the commissioner of revenue for any reason going to the merits of the tax, then the court shall certify of record that the tax was wrongfully paid and ought to be refunded, together with interest on the tax calculated forty-five (45) days from the date of filing a claim for refund or date of waiver by the commissioner pursuant to § 67-1-1802(c)(2), or on the date of payment in the case of any tax collected after suit was filed under § 67-1-1801, in accordance with § 67-1-1801(d). Thereupon, the commissioner of finance and administration shall issue such commissioner's warrant for the refund, which shall be paid in preference to all other claims on the state treasury.
(c) For the purpose of suits brought under this part, the commissioner of revenue shall be considered a resident of each of the several counties of the state.
(d) The court shall award to the prevailing party reasonable attorneys' fees and expenses of litigation up to twenty percent (20%) of the amount finally assessed or denied, including interest after payment; provided, that, attorneys' fees and expenses must not be awarded or paid for any amount awarded or denied based on an allegation that the franchise tax in chapter 4, part 21, of this title, or any provision of chapter 4, part 21, of this title, is unconstitutional by failing the internal consistency test. For purposes of this subsection (d), attorneys' fees shall not exceed fees calculated on the basis of reasonable hourly rates multiplied by a reasonable number of hours expended in the case and shall not be calculated by application of any premium, enhancement, or contingency. For purposes of this subsection (d), the state shall be deemed the prevailing party where the taxpayer is found by a court to be the transferee of assets conveyed in violation of title 66, chapter 3, or the tax, penalty or interest at issue in the case arises from the same underlying activity with respect to which the taxpayer or one of its officers, owners or employees was found to have committed fraud.
(e) The filing of the suit by the taxpayer tolls all statutes of limitations as to other persons potentially liable to the taxpayer due to the occurrence from which the claim before the court arises until the final determination of the suit.
(f) Appeals of any decision of the chancery court of suits brought under this part shall be under the Tennessee Rules of Appellate Procedure.
(g) Hearings and determination of all proceedings brought under this part, shall be expedited to the extent feasible and proper.
(h) Notwithstanding this part or another law to the contrary, a suit that contains a claim or allegation that the franchise tax in chapter 4, part 21, of this title, or any provision of that part, including § 67-4-2108 as that section existed prior to the effective date of this act, is unconstitutional by failing the internal consistency test must be filed on or before November 30, 2024.
The procedure established by this part is the sole and exclusive jurisdiction for determining liability for all taxes collected or administered by the commissioner of revenue, except that the state board of equalization shall have jurisdiction concurrent with the chancery court in inheritance tax cases in which only issues of valuation are raised, as provided by § 67-8-411, and the board designated in § 67-8-116 shall have jurisdiction concurrent with the chancery court in gift tax cases in which only issues of valuation are raised, as provided by § 67-8-116.
(a) All taxes paid on or after January 1, 1986, shall be governed by the laws regarding refunds and suits for the recovery of taxes as set out in this part.
(b)
(1) It shall not be a condition precedent for suit for recovery of taxes paid on or after January 1, 1986, that the taxes be paid under protest, involuntarily, or under duress.
(2) No suit for the recovery of any tax paid prior to January 1, 1986, shall be allowed unless such tax was paid under protest.
(c) To the extent that this section conflicts with any other law, this section shall control and supersede all such laws.
(a) As used in this section, unless the context otherwise requires:
(1) “Claimant” means any state agency, department, board, bureau, commission, or authority to which a taxpayer owes any debt listed in subsection (d) or that acts on behalf of a person to collect such debt. Such term may also include a clerk who serves a court of criminal jurisdiction, if the clerk has determined to participate in the offset provisions of this section;
(2) “Debt” means any money, unpaid account, or sum due and owing any claimant by a taxpayer, or any money, unpaid account, or sum that is due and owing any person and is legally enforceable by the claimant;
(3) “Debtor” means a person owing a debt to a claimant and who files a claim for a tax refund, subject to the further requirements of this section;
(4) “Offset” or “set off” means the application of all or part of a taxpayer's refund of taxes to pay a taxpayer's debt owed to a claimant; and
(5) “Person” or “taxpayer” means every individual, firm, partnership, joint venture, association, corporation, limited liability company, cooperative, trust, regulated investment company, receiver, and syndicate.
(b) Whenever a taxpayer has, on the date of payment, paid taxes in error or paid taxes against any statute, rule, regulation or clause of the constitution of the state or of the United States, and is due a refund pursuant to this part, and the taxpayer reports to be a debtor in the manner provided by § 67-1-1802(a)(1)(B)(ii), the commissioner shall offset the taxpayer's refund of taxes by the amount of the debt as provided in this section.
(c) This section shall apply to any claim for refund of state taxes filed by any taxpayer in the amount of two hundred dollars ($200) or more that is not eligible for automatic credit or refund pursuant to § 67-1-1802(a)(1)(A). A tax refund shall not be offset to pay the debt of any person who is not the taxpayer due the refund. Whenever a claim for refund is filed by two (2) or more persons, who were jointly and severally liable for the taxes paid, the entire refund amount shall be subject to offset to pay the debt or debts of one (1) or more of the taxpayers.
(d) The following debts shall be used to offset a refund of taxes:
(1) State tax liabilities due pursuant to this title;
(2) Child support due pursuant to title 36, chapters 2, 5, or 6, or pursuant to title 37, chapter 1;
(3) Amounts owed to the unemployment compensation fund pursuant to title 50, chapter 7;
(4) Obligations owing to the bureau of TennCare for overpayment of medical assistance benefits pursuant to title 71, chapter 5;
(5) Student loan or other obligation due to the Tennessee student assistance corporation pursuant to title 49, chapter 4;
(6) Fees, costs or restitution collected by a clerk who serves a court of criminal jurisdiction, if reported pursuant to subsection (f);
(7) Costs of incarceration due pursuant to title 41, chapter 21, part 9;
(8) Judgments and liens in favor of a claimant; and
(9) All other debts owed to any other claimant.
(e) In the event that a taxpayer owes debts to several claimants, priority of set off against any refund shall be as follows:
(1) State tax liabilities;
(2) Child support;
(3) Judgments and liens in favor of a claimant in order of the date entered or perfected; and
(4) All other debts owed to any other claimant in the order in which the debt was incurred.
(f)
(1) When a taxpayer reports that any debt is owed to a claimant in the manner provided by § 67-1-1802(a)(1)(B)(ii), and if the commissioner determines such taxpayer is entitled to a refund, then the commissioner shall notify the treasurer and each claimant identified in the documentation accompanying the claim for refund of the department's intent to issue a refund. Such notification shall also include:
(A) The name and address of the taxpayer;
(B) The original tax refund amount;
(C) The proposed offset amount; and
(D) The proposed net tax refund amount.
(2) The notification to the treasurer may include any other information that would assist the treasurer in determining whether the taxpayer may be the owner of unclaimed property held in trust on the owner's behalf. Following receipt of the notification, the treasurer shall verify to the department whether or not the taxpayer is the owner of unclaimed property. The amount of the debt owing to a claimant shall be set off against the amount of the unclaimed property otherwise due the taxpayer.
(3) Following receipt of the notification provided in subdivision (f)(1) and prior to an offset of a tax refund, a claimant shall provide written notice to the debtor, and to the commissioner of revenue, of the claimant's intent to set off all or part of the tax refund to pay the debt. Such notice shall set forth the:
(A) Original tax refund amount;
(B) Proposed offset amount;
(C) Proposed net tax refund amount;
(D) Basis for a claim to the debt and set off;
(E) Taxpayer's right to appeal the proposed offset as provided in subsection (g); and
(F) A toll-free telephone number or other contact information which the debtor may use in obtaining information from the claimant concerning the debt and the proposed offset action.
(g)
(1)
(A) If any debt has been previously determined to exist and to be due and owing as a result of a final order issued pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, or a judgment entered by any court of record, then a debtor shall be afforded an opportunity for a hearing to determine the continued existence of the debt and whether it remains outstanding. No hearing shall be conducted as provided in this subdivision (g)(1)(A) unless the time limits for appealing any prior final order or judgment have expired as provided by law.
(B) Any debtor who desires a hearing shall submit to the department of revenue a written request for a hearing within twenty (20) days of receipt of the notice provided in subdivision (f)(3). If a hearing is requested, then it shall be held by the commissioner of revenue or the commissioner's designee as provided in the Uniform Administrative Procedures Act. The commissioner may request that an administrative judge or hearing officer employed in the office of the secretary of state conduct the hearing as provided in the Uniform Administrative Procedures Act.
(2)
(A) If any debt has not been determined to exist, or to be due and owing as a result of a prior final order or judgment, as provided in subdivision (g)(1)(A), then a debtor shall be afforded an opportunity for a hearing, in accordance with subdivision (g)(2)(B), to determine the existence of the debt, and if so, whether the claimed debt asserted as due and owing is correct.
(B) Any debtor who desires a hearing shall submit to the claimant a written request for a hearing within twenty (20) days of receipt of the notice provided in subdivision (f)(3). The claimant shall notify the department of revenue as to whether the taxpayer filed a timely request for hearing upon the expiration of the twenty-day period for filing such request or receipt of a request for a hearing. If a hearing is requested, then it shall be held by the claimant or the claimant's designee as provided in the Uniform Administrative Procedures Act. If the amount due is incorrect, a proper adjustment shall be made. After entry of a final order following any hearing, the claimant shall send a copy of the final order to the commissioner of revenue.
(3) All final orders issued pursuant to the Uniform Administrative Procedures Act, as provided in subdivision (g)(1) or (g)(2), shall set forth the amount owed by the taxpayer to the claimant that is subject to set off.
(h)
(1) The commissioner of revenue shall set off the appropriate amount of a debt against the tax refund if a taxpayer fails to file a timely request for a hearing, or upon receipt of a final order, or as soon thereafter as practicable. Any portion of a tax refund remaining after the offset shall be refunded or credited to a taxpayer, as requested in the claim for refund. The commissioner shall ensure that the appropriate amount of the refund subject to set off is used to satisfy any debts owed by the taxpayer.
(2) The commissioner of revenue shall notify the taxpayer in writing and provide an accounting of the action taken on any refund whenever the commissioner sets off a taxpayer's refund pursuant to this section.
(3) The commissioner of revenue may require a claimant to pay a fee to reimburse the department of revenue's costs of collecting the debt on behalf of a claimant; provided, that the fee shall not exceed five dollars ($5.00) per offset action.
(i)
(1) On an annual basis, the department of revenue shall submit to the following claimants a list of taxpayers for the previous year who filed claims for refunds and received such refunds in the amount of two hundred dollars ($200) or more and for which no debts were reported in accordance with § 67-1-1802(a)(1)(B)(i):
(A) Department of human services;
(B) Department of labor and workforce development;
(C) Bureau of TennCare;
(D) Tennessee student assistance corporation;
(E) Administrative office of the courts; and
(F) Attorney general and reporter.
(2) If any such claimant receiving such list has information in its records verifying that a named taxpayer owed a debt as of the date of the claim for refund, such claimant shall notify the department of revenue of the name of the debtor, the amount of the debt, and the date on which the debt was incurred. The clerk who serves a court of criminal jurisdiction shall notify the department if the clerk has determined to participate in the offset provisions of this section. Notwithstanding any other law to the contrary, the department of revenue shall make an assessment against the taxpayer to recover the amount of the debt that would have otherwise been offset against the refund payment. The procedures established in subsection (g) to challenge a proposed offset shall be the sole and exclusive remedies for challenging an assessment made pursuant to this subsection (i); provided, that the debtor is provided information in the notice of assessment about the procedures for challenging such assessment and the twenty-day period for requesting a hearing shall begin from the date of the notice of assessment. Nothing in this section shall require any state agency or its employees or officers to violate strict standards of confidentiality set forth in applicable federal or state law or regulations.
(j) Notwithstanding part 17 of this chapter, or any other law prohibiting disclosure of a taxpayer's identity or tax information, all information exchanged among the department of revenue, the department of treasury, and any claimant necessary to accomplish the purpose of this section is lawful.
As used in this chapter, unless the context otherwise requires:
(1)
(A) “Bond” means all obligations issued by any person, firm, joint-stock company, business trust or corporation organized and doing business under the laws of this state, or any other state, evidenced by an instrument whereby the obligor is bound to pay interest to the obligee regardless of whether the obligor is doing business in this state, or whether the obligation under the terms of which the interest accrues is a mortgage or lien on property located in this state or beyond the jurisdiction of the state;
(B) “Bond” does not include:
(i) Ordinary commercial paper, trade acceptance, etc., maturing in six (6) months or less from the date of issuance; or
(ii) Certificates of deposit, repurchase agreements or similar evidences of indebtedness;
(2) “Commissioner” means the commissioner of revenue;
(3) “Corporate property” means the franchise, corporate excess or intangible value of the corporation as well as all other property;
(4) “Deficiency” means:
(A) The amount by which the tax imposed by this chapter exceeds the amount shown as the tax by the taxpayer upon the taxpayer's return; or
(B) If no amount is shown as the tax by the taxpayer upon the taxpayer's return, or if no return is made, the correct amount of the tax;
(5) “Person,” “it,” or any other singular pronoun means every natural person, inhabitant, resident, beneficiary of every trust or estate, partnership, joint-stock company, business trust, corporation or any other form of organization in receipt of dividends from corporate stocks and/or interest on bonds as defined in this section, regardless of the sources from which such income is derived, except as otherwise expressly provided. Any person who has a legal domicile in Tennessee shall be subject to the tax imposed; every person who maintains a place of residence in Tennessee for more than six (6) months in the tax year shall be subject to the tax imposed by this chapter, regardless of what place such person may claim as a legal domicile;
(6) “Stocks” means shares of stock issued by corporations chartered and organized under the laws of the state of Tennessee, or of any other state, or of the United States, or of any foreign government, and all interests in partnerships, associations, or trusts represented by transferable evidence of such interest; and
(7) “Taxpayer's tax year” means the calendar year, unless a fiscal year is elected by the taxpayer when the first fiscal year return is due to be filed.
An income tax shall be levied and collected annually on incomes derived by way of dividends from stocks or by way of interest on bonds of each person, partnership, association, trust and corporation in this state who received, or to whom accrued, or to whom was credited during any year income from the sources enumerated in this section, except as otherwise provided in this chapter. The rate of the tax imposed by this chapter shall be:
(1) For any tax year that begins on or after January 1, 2017, and prior to January 1, 2018, four percent (4%);
(2) For any tax year that begins on or after January 1, 2018, and prior to January 1, 2019, three percent (3%);
(3) For any tax year that begins on or after January 1, 2019, and prior to January 1, 2020, two percent (2%);
(4) For any tax year that begins on or after January 1, 2020, and prior to January 1, 2021, one percent (1%); and
(5) For any tax year that begins on or after January 1, 2021, and for subsequent tax years, zero percent (0%).
(a) The tax imposed by this chapter does not apply to the first one thousand two hundred fifty dollars ($1,250) for each individual return or two thousand five hundred dollars ($2,500) of combined income for persons who file jointly, of income otherwise taxable under this chapter.
(b) For tax years beginning January 1, 2000, and thereafter, any person sixty-five (65) years of age or older having a total annual income derived from any and all sources of sixteen thousand two hundred dollars ($16,200) or less, or any persons who file a joint return and either spouse is sixty-five (65) years of age or older having a total annual joint income derived from any and all sources of not more than twenty seven thousand dollars ($27,000), are exempt from the income tax imposed by this chapter upon submission of evidence deemed acceptable by the commissioner to establish the age and income limitations stated in this subsection (b). For tax years beginning January 1, 2012, and thereafter, the income levels specified in the previous sentence in this subsection (b) shall change to twenty-six thousand two hundred dollars ($26,200) for single filers and to thirty-seven thousand dollars ($37,000) for persons filing jointly. For tax years beginning January 1, 2013, and thereafter, the income levels specified in the previous sentence in this subsection (b) shall change to thirty-three thousand dollars ($33,000) for single filers and to fifty-nine thousand dollars ($59,000) for persons filing jointly. For tax years beginning January 1, 2015, and thereafter, the income levels under this subsection (b) shall change to thirty-seven thousand dollars ($37,000) for single filers and to sixty-eight thousand dollars ($68,000) for persons filing jointly.
(c) The income from stocks and bonds, mortgages, and notes owned and held by blind persons, or by persons certified, in writing, by a medical doctor to be a quadriplegic, and where such income is derived from circumstances resulting in the individual becoming a quadriplegic, are exempt from the tax imposed by this chapter.
(d) No Tennessee citizen declared by the United States department of defense to be a prisoner of war is liable for payment of the tax provided for by this chapter during the time of such person's capture and imprisonment, nor for sixty (60) days upon such person's release, whenever it should occur.
(e)
(1) Nothing contained in this chapter shall be construed or held to authorize the levy of an income tax on obligations of the United States, whether evidenced by bonds or otherwise and/or on shares of stock in corporations that are arms and agencies directly of the United States, insofar as such bonds and stocks are exempt from such taxation by the constitution or laws of the United States; or on the income derived from bonds of the state of Tennessee, or any county or municipality or other political subdivision of the state of Tennessee not subject to ad valorem taxation.
(2) Nothing contained in this chapter shall be construed or held to authorize the levy of an income tax on dividends from a regulated investment company qualified as such under Subtitle A, chapter 1, subchapter M of the Internal Revenue Code (26 U.S.C. § 851 et seq.); provided, that a part of the value of the investments of such regulated investment company shall be in any combination of bonds or securities of the United States government or any agency or instrumentality of the United States government or in bonds of the state of Tennessee, or any county or any municipality or political subdivision of the state of Tennessee, including any agency, board, authority or commission of the United States or the state of Tennessee. Such dividends shall be exempt from the levy of an income tax only in proportion to the income of the regulated investment company attributable to interest on bonds or securities of the United States government or any agency or instrumentality of the United States government or on bonds of the state of Tennessee, or any county or any municipality or political subdivision of the state of Tennessee, including any agency, board, authority or commission of the United States or the state of Tennessee.
(3) No corporation shall be required to pay any income tax that otherwise would be assessable under this chapter on any stocks and/or bonds that constitute a part of the aggregate of its corporate property on which it is now assessed or shall be assessed for ad valorem taxes; nor when such stocks and/or bonds constitute a part of the assets that determine the value of the shares that are now or shall hereafter be assessed for ad valorem taxes to the stockholder.
(4) No person shall be assessed with this tax on income from any stock in any corporation where the value of the shares is assessed ad valorem to the stockholder by this state.
(5) No person shall be assessed with this tax on income from any stock in any corporation licensed to do business in this state as an insurance company.
(6) No person shall be assessed with this tax on income from any stock in any bank, state or federally chartered, doing business in this state.
(7) No distribution of capital shall be taxed as income under this chapter, and no distribution of surplus by way of stock dividend shall be taxable in the year such distribution is made; but all other distributions out of earned surplus shall be taxed as income when and in whatever manner made, regardless of when such surplus was earned. Stock dividends issued within one (1) year of liquidation shall be taxable in the year received to the extent made out of earned surplus; provided, that gains over and above the par or original pro rata capital value of original shares held shall be taxed to the shareholder upon any transfer of stock to nonresidents in the year of such transfer, when such transfer occurs within one (1) year prior to liquidation or redemption. There shall, however, be exempt from taxation under this section distribution made pursuant to decrees ordering divestiture of stock in enforcement of antitrust statutes.
(8) The income from stocks and bonds of educational, religious or other like institutions organized for the general welfare and not for profit or individual gain that are exempt from taxation under the Assessment Act, codified in § 67-5-212, shall be exempt from the taxes imposed by this chapter; provided, that if any educational, religious or other like institution issues stocks or bonds, the income or profit or any part of which goes to private individuals or corporations for profit or gain and not purely for educational, religious or charitable purposes, such income or profit shall be subject to the tax imposed in this chapter.
(9) The income from stocks and bonds of pension trusts and profit sharing trusts that are exempt from federal income taxation is exempt from the taxes imposed by this chapter.
(10) The income from stocks and bonds held by a fiduciary and paid to or irrevocably set aside for the benefit of educational, religious, or other like institutions organized for the general welfare and not for profit or individual gain that are exempt from taxation under the Assessment Act, codified in § 67-5-212, is exempt from the taxes imposed by this chapter.
(11) All income from interest on loans to qualified businesses for improvements, expansions, operations, or real property within an enterprise zone, as defined in title 13, chapter 28, part 2 shall be exempt from tax.
(12) The income derived from the trust funds in a trust created for the perpetual care of a cemetery pursuant to title 46 shall be exempt from the taxes imposed by this chapter.
(13) Nothing contained in this chapter shall be construed or held to authorize the levy of any tax on earnings or distributions from an investment fund organized as a unit investment trust taxable as a grantor trust under 26 U.S.C. §§ 671-677, or organized as a limited partnership taxable under 26 U.S.C. §§ 701-761 and registered under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.); provided, that a part of the value of the investments of such investment fund shall be in any combination of bonds or securities of the United States government, or any agency or instrumentality of the United States government, or in bonds of the state of Tennessee, or any county or any municipality or political subdivision of the state of Tennessee, including any agency, board, authority or commission of the United States or the state of Tennessee. Such earnings or distributions shall be exempt from the levy of an income tax only in proportion to the income of the investment fund attributable to interest on bonds or securities of the United States government, or any agency or instrumentality of the United States government, or on bonds of the state of Tennessee, or any county or any municipality or political subdivision of the state of Tennessee, including any agency, board, authority or commission of the United States or the state of Tennessee.
(14) Nothing contained in this chapter shall be construed or held to authorize the levy of any tax on earnings or distributions from an education individual retirement account as defined in § 213 of Public Law 105-34, so long as such earnings or distributions were not subject to federal income tax.
(15) Nothing contained in this chapter shall be construed or held to authorize the levy of any tax on earnings or distributions from a Roth IRA as defined in Section 302 of Public Law 105-34, so long as such earnings or distributions are not subject to federal income tax.
(16) The tax imposed by this chapter does not apply to an entity that satisfies both of the following requirements:
(A) It:
(i) Is classified as a partnership or trust in accordance with 26 U.S.C. § 7701, and the federal regulations and rulings promulgated under 26 U.S.C. § 7701;
(ii) Has elected to be treated as a real estate mortgage investment conduit (REMIC) under 26 U.S.C. § 860D;
(iii) Has elected to be treated as a financial asset securitization investment trust (FASIT) under 26 U.S.C. § 860L; or
(iv) Is a business trust, as defined in § 48-101-202(a), or is classified as a trust under the laws of the state in which it is created and is disregarded for federal income tax under 26 U.S.C. § 7701, and the federal regulations and rulings promulgated under 26 U.S.C. § 7701, when the commercial domicile of the trustee is not in this state; and
(B)
(i) The sole purpose of the entity, except for foreclosures and dispositions of the assets of foreclosures, is the asset-backed securitization of debt obligations, such as first or second mortgages, including home equity loans, trade receivables, whether an open account or evidenced by a note or installment or conditional sales contract, obligations substituted for trade receivables, credit card receivables, personal property leases treated as debt for purposes of the Internal Revenue Code of 1986 (26 U.S.C.), home equity loans, automobile loans or similar debt obligations;
(ii) “Trade receivables” as used in subdivision (e)(16)(B)(i) means obligations arising from the sale of inventory in the ordinary course of business.
(17) The income from stock in any publicly traded real estate investment trust, as defined in § 67-4-2004, is exempt from the tax imposed by this chapter.
(18) The income from stocks and bonds of trusts for perpetual care or improvement of private cemeteries, graves, or burial grounds are exempt from the taxes imposed by this chapter.
(f) For tax years beginning January 1, 2018, and thereafter, any person one hundred (100) years of age or older, or any persons who file a joint return and either spouse is one hundred (100) years of age or older, are exempt from the income tax imposed by this chapter.
Stocks and bonds upon the income from which a tax is imposed under this chapter shall not be back assessed for taxation by the state or any municipality, county or political subdivision of the state and the state of Tennessee and municipalities, counties and political subdivisions of this state, and the officials and representatives of the state are expressly prohibited from back assessing for ad valorem tax any such stocks and/or bonds for any year or years.
(a) Every person liable for the tax or taxes imposed by or levied under the authority of this chapter shall on or before the fifteenth day of the fourth month commencing after the end of the taxpayer's tax year make out, on forms prescribed by the commissioner, and file with the commissioner a statement or return setting out, in detail, the stocks and/or bonds for the receipt of income from which the taxpayer is liable for the tax or taxes imposed by this chapter, each security to be set out separately, and listing opposite each such item or security the amount of income received from the item or security during the taxpayer's preceding tax year; and showing the amount of the tax owing by such person to the state of Tennessee; and showing the residence of the taxpayer at the time of the filing of the return, and the residence of such taxpayer as of twelve o'clock (12:00) noon on the last day of the taxpayer's preceding tax year.
(b)
(1) Any such statement or report shall be signed and verified by the oath of the president, vice president, treasurer, assistant treasurer or managing agent in this state of the association, trust or corporation making the statement or report.
(2) Returns filed by individuals shall contain or be verified by a written declaration that the return is made under the penalties of perjury.
(c) The commissioner has the power to require all such other information from any person filing a return as, in the commissioner's opinion, may be necessary to effectuate the purposes of this chapter.
(d) It is the duty of the department to provide suitable blanks and forms on which taxpayers, subject to this chapter, shall make their returns for taxation pursuant to this section.
(e) An extension of six (6) months in which to file the return required by this section, and to pay the tax shown to be due, shall be granted; provided, that a request for extension is made in writing by the taxpayer or the taxpayer's authorized representative on a form prescribed by the commissioner, or by providing a copy of the taxpayer's request for an automatic extension of time to file the federal income tax return for the corresponding tax period. The request shall not be filed on the original due date of the return, but, instead, shall be attached to the return filed on or before the extended due date. Interest, as provided by § 67-1-801(a), shall attach to the unpaid amount due, from the original due date of the return until the date paid. If the taxpayer fails to file the request for extension required by this subsection (e), or if the return is not filed with payment of the tax shown to be due by the extended due date, penalty as provided by § 67-1-804 shall attach as though no extension had been granted.
(f)
(1) As used in this subsection (f), “perfection period” means a period of ten (10) calendar days, beginning with the day after date of the first transmission of an electronic return that is subsequently rejected by the commissioner, for the taxpayer to either:
(A) Correct any errors in the return that cause it to fail to meet any of the validation criteria set by the commissioner and retransmit it; provided, that the commissioner subsequently accepts the corrected return; or
(B) File a paper return postmarked on or before the expiration of the ten (10) calendar days; provided, that the taxpayer is not required to electronically file or the commissioner grants the taxpayer permission to file the return on paper.
(2) A taxpayer's electronically filed return shall be treated as filed on the date of the last transmission prior to the return being accepted by the commissioner, except as provided in subdivision (f)(3). A taxpayer's paper return shall be treated as filed when mailed and postmarked, except as provided in subdivision (f)(3).
(3) A return that complies with the requirements of the perfection period shall be treated as filed on the date of the first electronic transmission.
(a) Except in accordance with proper judicial order or as otherwise required by law, it is unlawful for the commissioner and any deputy, agent, clerk or other officer or employee, to make known in any manner the amount of income or any particular set forth in any report or return required under this chapter, nor shall the information contained in any report filed by any taxpayer under the requirements of this chapter be used by the state or any county or municipality for the purpose of imposing any other or different tax on any such taxpayer; provided, that nothing in this section shall be construed to prohibit the publication of statistics so classified as to prevent the identification of particular reports or returns by legal representatives of the state in any suit or suits for the collection of the tax or any part of the tax or for the penalty and interest imposed by this chapter.
(b) A violation of any of this section is a Class A misdemeanor.
(c) The commissioner of revenue may permit the commissioner of the internal revenue service, or the proper officer of any state imposing a tax similar to that imposed by this chapter, or the authorized representative of either such officer, to inspect the tax return of any corporation, or may furnish to such officer or to the officer's authorized representative an abstract of the return of any corporation or supply the officer or representative with information concerning any item contained in any return; but such permission shall be granted or such information furnished to such officer or representative only if the statutes or regulations of the United States or of such other state, as the case may be, grant substantially similar privileges to the governor or the proper officers of this state charged with the administration of this chapter.
(d) Municipal and county assessors of property shall be permitted by the commissioner and any deputy, agent, clerk, or other officer or employee, to inspect the tax return of any corporation and, upon request of such municipal or county assessors of property, the commissioner and any deputy, agent, clerk, or other officer or employee, shall be required to furnish to such assessor of property or the assessor of property's authorized representative an abstract of the return of any corporation or supply the assessor of property or representative with information concerning any item contained in any return.
When and if a broker or commission dealer does not make physical delivery to the broker's or commission dealer's customers of stocks and bonds, income from which is taxable under this chapter, but retains possession or title, or both, in such broker or commission dealer or through a nominee agent depository of such security and receives such income or credit for the stocks and bonds, the broker or commission dealer shall report such income to the commissioner, and pay the tax on the income measured by the dividends or interest credited, or which should be credited, to the accounts of the broker's or commission dealer's customers, unless the broker or commission dealer furnishes to the commissioner a list of the broker's or commission dealer's customers, with the last known address of each, to whom such dividends or interest have been paid or credited and the amount of the dividends or interest.
(a) Trustees, guardians, administrators, executors, and other persons acting in a fiduciary capacity who receive income taxable under this chapter for the benefit of residents of Tennessee shall be required to make returns under this chapter and to pay the tax levied by this chapter. However, a trustee of a charitable remainder trust, as defined in Internal Revenue Code § 664 (26 U.S.C. § 664), shall not be required to make returns under this chapter nor to pay the tax, but shall report to each resident beneficiary the amount of taxable income distributed to such resident beneficiary, who shall be liable for the tax under this chapter. Additionally, the trustee of a trust, which is treated under 26 U.S.C. §§ 671-678 as owned by one (1) grantor or one (1) other person and which does not obtain a taxpayer identification number, as permitted under the Internal Revenue Code and accompanying regulations, shall not be required to file returns under this chapter nor to pay the tax, but shall report the total amount of income received by the trustee to the resident grantor or other person, who shall file the return and pay the tax levied by this chapter.
(b) Trustees, guardians, and other persons acting in a fiduciary capacity who are residents of Tennessee, and who receive income on behalf of nonresident beneficiaries, shall not be required to pay tax under this chapter even though such income be derived from stocks or bonds that would otherwise be assessable under this chapter. However, executors or administrators receiving income taxable under this chapter from stocks or bonds that were the property of a decedent who, at the time of death, resided in Tennessee shall pay tax upon the stocks or bonds until the time as such stocks or bonds have been distributed or transferred to distributees or legatees of the decedent.
(a) Any resident of Tennessee who receives income from a trust estate located outside this state, any portion of which is invested in securities, the income from which is taxable under this chapter, whether the trust estate be revocable or irrevocable, shall file with the commissioner, as part of the resident's income tax return, a sworn statement of the trustee, executor or other administrator of the trust estate showing what portion of the total income received by such Tennessee resident from such estates was derived from securities, the income from which is taxable under this chapter.
(b) If such resident fails to file such sworn statement from the trustee, executor or other administrator, then the resident shall report for income taxation in the manner otherwise provided in this chapter the entire amount of income received by the resident from such trust estate.
(a) The tax or taxes due and payable on account of income received during a taxpayer's tax year shall be paid in full on or before the fifteenth day of the fourth month commencing after the end of the taxpayer's tax year.
(b)
(1) No tax owed under this chapter by a person in the armed forces of the United States, or called into active military service of the United States, as defined in § 58-1-102, from a reserve or national guard unit, shall be due until one hundred eighty (180) days following the conclusion of hostilities in which such person is actually engaged outside the United States or one hundred eighty (180) days after such person is transferred from the theater of operations of such hostilities, whichever is sooner.
(2) A person claiming this delay shall present proof, satisfactory to the commissioner, of such person's deployment and stationing outside the United States during a period of hostilities and proof of such person's return from such deployment.
(3) This subsection (b) shall expressly apply to personnel stationed outside the United States during Operation Enduring Freedom or other hostilities where the military personnel are entitled to combat compensation as determined by the United States department of defense.
(4) The estate of any such person who is killed in action in such hostilities shall owe no tax under this chapter, and any liability for any such tax, penalty or interest is forgiven.
(a) The commissioner has full supervision of the administration and enforcement of this chapter and of the collection of all taxes imposed under this chapter.
(b) The commissioner is empowered to call upon other departments of the state for such information and assistance as the commissioner may deem necessary.
(c) The commissioner has the power to compel the attendance of witnesses and the production of evidence, by subpoena, to administer oaths and to take testimony in relation to any matter under this chapter.
(d) The commissioner may designate such deputies, appraisers, agents and other assistants as may be necessary for carrying out the full purpose and intent of this chapter. Such deputies, appraisers, agents and assistants, so designated by the commissioner, shall be empowered to represent the commissioner and to perform such duties as are, by this chapter, required of the commissioner, including the power to issue subpoenas and administer oaths, and shall make bonds for the faithful performance of their duties, such bonds to be in such amounts and with such surety or sureties as the commissioner may prescribe.
(e) The commissioner is further authorized and empowered to and the commissioner shall make all necessary rules and regulations not inconsistent with the terms of this chapter, which rules and regulations shall have the force and effect of law, for the purpose of fully carrying out, interpreting properly, enforcing, and giving effect to this chapter.
(a) In computing the interest and penalty payable under this section, there shall be excluded, in the case of an individual serving in the armed forces of the United States, or serving in support of such armed forces in an area designated by the president of the United States by executive order as a “combat zone,” at any time during the period designated by the president by executive order as the period of combatant activities in such zone, or hospitalized outside the states of the union and the District of Columbia as a result of injury received or disease incurred while serving in such an area during such time, the period of service in such area, plus the period of continuous hospitalization outside the states of the union and the District of Columbia attributable to such injury or disease and the next ninety (90) days thereafter.
(b) The assessment or collection of any income tax or of any liability to the state of Tennessee with respect to any such tax, or any action or proceeding by or on behalf of the state in connection with the tax, may be made, taken, begun, or prosecuted in accordance with law, without regard to subsection (a), unless prior to such assessment, collection action or proceeding it is ascertained that the individual concerned is entitled to the benefits of subsection (a).
(a) As soon as practicable after the return required is filed, the commissioner shall examine it and determine the correct amount of the tax. If the required return is not filed on or before the date due, the commissioner shall determine the amount of the tax upon the basis of any information the commissioner may possess or obtain.
(b) Whenever in the judgment of the commissioner it is deemed necessary, the commissioner may require any person, by notice served upon the person by mail, to render under oath such statements or to reveal such information and records as the commissioner deems sufficient to show whether or not such person is liable for tax under this chapter.
(c)
(1) If the commissioner, in determining the correct amount of the tax, determines that there is a deficiency in respect of the tax imposed by this chapter, the commissioner shall send notice of the deficiency to the taxpayer by mail and shall make demand for the amount of the deficiency, which amount shall be paid by the taxpayer.
(2) The deficiency, regardless of when paid, shall, for purposes of computing interest and penalty on the deficiency, be deemed to have been due on the due date provided in § 67-2-112, that is, the fifteenth day of the fourth month commencing after the end of the taxpayer's tax year.
(3) Notice of deficiency may be issued for the purpose of making or revising, correcting, and/or increasing assessments and/or returns or reports of persons for the year in which such notice may be issued and/or five (5) years preceding such year, but no longer or otherwise; provided, that in the case of a fraudulent return with intent to evade tax or of a failure to file a return, the statute of limitations will not apply.
The commissioner may issue a distress warrant for the collection of the tax imposed by this chapter, together with interest and penalty on the tax, in accordance with § 67-4-110(a)-(d).
It is the duty of the commissioner, within thirty (30) days after the receipt by the commissioner of any taxes imposed by the terms of this chapter, to turn over to the comptroller of the treasury the tax or taxes collected in accordance with the terms and provisions of this chapter, less the necessary expenses for the administration of this chapter, which expenses shall not exceed ten percent (10%) of the first two hundred thousand dollars ($200,000), of taxes collected under this chapter during any fiscal year, and five percent (5%) of taxes so received in excess of the sum of two hundred thousand dollars ($200,000). At the time the commissioner turns over such tax to the comptroller of the treasury, the commissioner shall furnish to the comptroller of the treasury a duplicate statement giving the names of the taxpayers, their respective addresses and the amounts paid and dates of payment, and the comptroller of the treasury shall cause such list so furnished to be checked back with the original records in the office of the commissioner, to the end that the statement so furnished to the comptroller of the treasury may be audited and verified.
A sum not to exceed three-fifths (⅗) of all penalties collected during the preceding fiscal year may be used for administrative purposes and for the collection of the tax or taxes imposed by this chapter, such sum to be in addition to that authorized by § 67-2-117.
(a) Of the taxes collected under this chapter upon income from stocks and bonds taxable at the rate provided in § 67-2-102 per annum, five-eighths (⅝) shall be paid into the general fund of the state treasury and the remaining three-eighths (⅜) shall be distributed among the cities and counties of the state.
(b) Where a taxpayer residing within the corporate limits of any municipality pays a tax imposed at the rate provided in § 67-2-102 per annum, then three-eighths (⅜) of the net tax collected from such taxpayer shall be returned to the city within which such taxpayer resides.
(c) Where a taxpayer residing in a county, but outside the corporate limits of any municipality, pays a tax imposed by this chapter at the rate provided in § 67-2-102 per annum, then three-eighths (⅜) of the net tax collected from such taxpayer shall be returned to the county within which such taxpayer resides.
(d) In each instance, the payment to cities and counties covering collections made under this section during any fiscal year shall be made on or before July 31 immediately following the close of that year.
Nothing contained in this chapter shall be construed, in any way, to prevent any taxpayer from showing any legal remedy provided by law, and the taxpayer shall have all the remedy, legal and equitable, now allowed any person for the recovery of taxes and revenue improperly collected by paying the tax under protest.
(a) Any person failing to file a return, as required by § 67-2-107, or any person violating any rule or regulation that may be promulgated by the commissioner under the authority vested in the commissioner in this chapter, commits a Class C misdemeanor.
(b) The making of a false return with intent to defeat the tax constitutes a Class E felony.
A resident individual who is a shareholder of a Subchapter S corporation that is incorporated and doing business in another state may deduct from the tax otherwise due under this chapter the tax paid to the other state as a result of such income, distributions or dividends; provided, that there exists a tax credit reciprocity agreement between Tennessee and the other state. In no case shall the credit permitted under this section exceed the tax that would be payable to this state.
(a) The department shall assist the board of trustees of the college savings trust fund program in the implementation of an income tax incentive established under § 49-7-805(4) that shall include, but not be limited to, college savings plan incentive inserts in the department's income tax notifications, providing college savings plan incentives information with any website tax payment form, sending other notifications about college savings incentives by electronic means, and providing information about college savings incentives through any other web-based means.
(b) For any insert included in the mailing of renewal notices that causes the total postal weight to be over one ounce (1 oz.) as permitted by the United States postal service, the board of trustees of the college savings trust fund program shall pay the increased cost of mailing.
(a) The reduction to the rate of tax made by chapter 1064 of the Public Acts of 2016 shall not be construed to absolve any taxpayer of liability for any tax duly levied by this chapter, during a tax year that began prior to January 1, 2016.
(b) It is the legislative intent that the tax be reduced by one percent (1%) annually through enactments of general bills beginning with the first annual session of the 110th general assembly.
(c) The income tax levied by this chapter is eliminated for tax years that begin on or after January 1, 2021; provided, however, that this subsection (c) shall not be construed to absolve any taxpayer of liability for any tax duly levied by this section, during a tax year that began prior to January 1, 2021.
(1) For tax years beginning January 1, 2017, and thereafter, there shall be allowed a credit of thirty-three percent (33%) of the value of a direct or indirect cash investment by an angel investor against the liability of such angel investor under this chapter in the tax year in which the investment was made. All credits allowed under this subsection (a) are nonrefundable and nontransferable. Any unused credit allowed under this subsection (a) may be carried forward for five (5) years after the tax year in which the credit originated.
(2) For purposes of this section, “angel investor” means a natural person who:
(A) Is an accredited investor as defined in 17 CFR 230.501(a)(5) or (a)(6); and
(B) Invests in a company that, at the time of the investment:
(i) Is an innovative small business with high-growth potential, including, but not limited to, tech-enabled startups and companies in the fields of consumer products, medical devices, life science, or additive manufacturing; or is a company that has received small business innovation research/small business technology transfer (SBIR/STTR) funding; or is commercializing technology developed at a research institution within this state;
(ii) Is not a professional service firm and is not primarily engaged in the provision of goods or services within the following industries: construction, leisure, hospitality, retail, real estate, insurance, banking, lobbying, consulting, alcohol, or gambling;
(iii) Has been in business for five (5) or fewer years;
(iv) Has, based on the prior fiscal year, three million dollars ($3,000,000) or less in gross annual revenue; and
(v) Has fifty (50) or fewer full-time employees, as defined in § 67-4-2109(f)(1)(A), and at least sixty percent (60%) of those employees perform the majority of their job duties within this state.
(3) The credit allowed under this subsection (a) shall be limited to fifty thousand dollars ($50,000) per angel investor in any tax year.
(4) For tax years beginning in 2017, a maximum of three million dollars ($3,000,000) in tax credits may be allowed under this subsection (a). For tax years beginning in 2018, a maximum of four million dollars ($4,000,000) of credits may be allowed under this subsection (a). For tax years beginning January 1, 2019, and thereafter, a maximum of five million dollars ($5,000,000) of credits may be allowed under this subsection (a).
(5)
(A) A credit may be allowed under this subsection (a) only if the investment is at least fifteen thousand dollars ($15,000) and represents no more than forty percent (40%) of the capitalization of the company at the time of the investment.
(B) Within sixty (60) days of the date of the investment, the angel investor shall apply to the Tennessee technology development corporation, in a manner to be determined by the Tennessee technology development corporation, for a certificate of qualification under this section. The angel investor shall affirm that all requirements for qualification under subdivision (a)(2) have been met, and shall provide proof of the investment in a form to be determined by the Tennessee technology development corporation. Certificates of qualification shall be issued by the Tennessee technology development corporation on a first-come, first-served basis. The Tennessee technology development corporation shall ensure that the amount of all certificates of qualification issued under this subdivision (a)(5)(B) does not exceed the maximum annual amounts described in subdivision (a)(4).
(C) The angel investor shall submit the certificate of qualification described in subdivision (a)(5)(B) to the department of revenue when claiming a credit under this section.
(6) A qualified angel investor who invests in a company located in a Tier 4 county, as defined in § 67-4-2109(a)(2)(C), shall be allowed a credit of fifty percent (50%) of the value of such investment against the liability of such angel investor under this chapter. The angel investor shall otherwise be subject to all other requirements described in this section.
(b) A review of the cumulative effectiveness of the credit authorized under this section shall be conducted by the Tennessee technology development corporation by July 1, 2020. Such review shall include, but is not limited to, the number and type of businesses that received angel investments, the number of angel investors and the aggregate amount of cash investments, the current status of each business that received angel investments, and the estimated economic impact to the state of businesses that received an investment under this section. A report containing the findings of the review conducted pursuant to this subsection (b) shall be generated. A copy of the report shall be transmitted to the governor, the speaker of the senate, the speaker of the house of representatives, the chair of the finance, ways and means committee of the senate, the chair of the finance, ways and means committee of the house of representatives, the commissioner of economic and community development, and the commissioner of revenue.
It is the intent of the general assembly in enacting this chapter to:
(1) Establish an efficient and effective motor fuel tax collection and enforcement system adequate to substantially deter motor fuel tax evasion emanating from sources inside and outside this state;
(2) Amend prior Tennessee law to change the point of taxation of diesel fuel; and
(3) Maintain the previously existing system of taxation of petroleum products to the greatest extent possible within the framework of the modifications listed in subdivisions (1) and (2).
As used in this chapter, unless the context otherwise requires:
(1) “Agricultural purposes” means operating tractors or other farm equipment used exclusively, whether for hire or not, in plowing, planting, harvesting, raising or processing of farm products at a farm, nursery or greenhouse; or operating farm irrigation systems; when such vehicles or equipment are not operated upon the public highways of this state;
(2) “Alternative fuel” means a liquefied petroleum gas or compressed natural gas product used in an internal combustion engine or motor to propel any form of motor vehicle, machine, or mechanical contrivance. “Alternative fuel” includes all forms of fuel commonly known as butane, propane, or compressed natural gas;
(3) “Blend stock” means any petroleum product component of gasoline, such as naphtha, reformate, or toluene, that can be blended for use in a motor fuel. However, “blend stock” does not include any substance that will be ultimately used for consumer nonmotor fuel use and is sold or removed in drum quantities of not more than fifty-five gallons (55 gals.) at the time of the removal or sale;
(4) “Blended fuel” means a mixture composed of gasoline or diesel fuel and another liquid, other than a minimal amount of a product such as carburetor detergent or oxidation inhibitor, that can be used as a fuel in a highway vehicle;
(5) “Blender” means any person that produces blended motor fuel outside the bulk transfer/terminal system;
(6) “Blending” means the mixing of one (1) or more petroleum products, with or without another product, regardless of the original character of the product blended, if the product obtained by the blending is capable of use or otherwise sold for use in the generation of power to propel a motor vehicle, an airplane, a motorboat, or other mechanical contrivance. “Blending” does not include blending that occurs in the process of refining by the original refiner of crude petroleum or the blending of products known as lubricating oil and greases;
(7) “Bonded importer” means a person with a valid bonded importer's license under § 67-3-606;
(8) “Bulk end user” means a person who receives into the person's own storage facilities, for the person's own consumption, transport lots of taxable motor fuel;
(9) “Bulk export” means the movement of petroleum products from a point in Tennessee to another state by means of transport truck, pipeline, marine vessel or rail, including any quantity of petroleum product placed by the manufacturer into the vehicle fuel supply tank of a newly manufactured motor vehicle;
(10) “Bulk plant” means a motor fuel storage and distribution facility that is not a terminal and from which motor fuel may be removed at a rack;
(11) “Bulk transfer” means any transfer of a petroleum product within the bulk transfer/terminal system from one location to another by pipeline or marine delivery;
(12) “Bulk transfer/terminal system” means the motor fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Thus, gasoline in a refinery, pipeline, vessel, or terminal is in the bulk transfer/terminal system. Taxable motor fuel in the fuel supply tank of any engine, or in any tank car, rail car, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system;
(13) “Commissioner” means the commissioner of revenue or the commissioner's designated subordinate official;
(14) “Computer-type pump” means a pump used to dispense fuel, that has meters for registering the total sales price and gallons sold, and displays the price per gallon on the dispenser;
(15) “Customer-controlled pump” means a pump used for dispensing motor fuel directly to a customer who can access the pump by way of a personal key, an identification number, or a customer card that is assigned to the customer by a licensed wholesaler;
(16) “Dead storage” means the amount of taxable motor fuel that will not be pumped out of a storage tank because the motor fuel is below the mouth of the draw pipe. For this purpose, a vendor may assume that the amount of motor fuel in dead storage is two hundred gallons (200 gals.) for a tank with a capacity of less than ten thousand gallons (10,000 gals.), and four hundred gallons (400 gals.) for a tank with a capacity of ten thousand gallons (10,000 gals.) or more;
(17) “Department” means the department of revenue;
(18) “Destination state” means the state, territory, or foreign country to which petroleum products are directed for resale or use;
(19) “Diesel fuel” means any liquid that is commonly or commercially known or sold as a fuel that is suitable for use in a diesel-powered highway vehicle. A liquid meets this requirement if, without further processing or blending, the liquid has practical and commercial fitness for use in the propulsion engine of a diesel-powered highway vehicle. “Diesel fuel” does not include jet fuel or kerosene unless sold for use in a diesel-powered highway vehicle or used in such vehicles, in which case the fuel shall be deemed diesel fuel for taxation purposes. With regard to jet fuel, it is further provided that the buyer must be registered to purchase jet fuel subject to federal taxes applicable to jet fuel, and the vendor must obtain certification of such fact satisfactory to the department prior to making the sale;
(20) “Diesel-powered highway vehicle” means a motor vehicle, propelled by a diesel-powered engine, that is operated, or intended to be operated, on a highway;
(21) “Distributor report” means the report required under § 67-3-701;
(22) “Diverted shipment” means any shipment of a petroleum product where the movement of that product by a transporter is changed from the original point of destination to another point of destination;
(23) “Dyed diesel fuel” means diesel fuel dyed under United States environmental protection agency rules for high sulfur diesel fuel, or dyed under internal revenue service rules for low sulphur fuel, or dyed pursuant to any other requirements subsequently set by the environmental protection agency or internal revenue service, including any invisible marker requirements;
(24) “Ethanol” means fuel grade ethanol;
(25) “Export” means to obtain petroleum products in this state for sale, use, or distribution in another state. In applying this definition, the delivery of petroleum products outside Tennessee by or for the vendor constitutes an export by the vendor, and the delivery of petroleum products outside Tennessee by or for the purchaser constitutes an export by the purchaser;
(26) “Exporter” means any person, other than a supplier, who purchases or otherwise holds title to taxable petroleum products in this state for the purpose of transporting or delivering the products to another state or country;
(27) “Farm products” means flowers and plants, including cut flowers, flowering plants, potted plants, vegetables and vegetable plants, trees, shrubs, vines, ornamentals, sod, and mushrooms. “Farm products” also means livestock and poultry raised for food, including dairy products;
(28) “Fuel alcohol” means any alcohol used or intended for use as fuel in a combustion engine or heating oil system;
(29) “Fuel grade ethanol” means a product that meets the American Society for Testing and Materials (ASTM) standard in effect on January 1, 1995, and any successor rule, as the D-4806 specification for denatured fuel grade ethanol, for blending with gasoline for use as automatic spark-ignition engine fuels;
(30) “Fuel transportation vehicle” means a vehicle designed for highway use that is also designed or used to transport motor fuels, including transport trucks and tank wagons;
(31) “Gallon” or “net gallon” means the amount of petroleum product, corrected to a temperature of sixty degrees Fahrenheit (60°F) and a pressure of fourteen and seven-tenths pounds per square inch (14.7 p.s.i.), necessary to completely fill a standard United States gallon liquid measure;
(32) “Gasohol” means a blended fuel composed of gasoline and ethanol;
(33) “Gasoline” means all products commonly or commercially known or sold as gasoline that are suitable for use as a motor fuel, but does not include any product that is sold as a product other than gasoline and has an ASTM octane number of less than seventy-five (75) as determined by the “motor method”; and does not include aviation gasoline; provided, that the buyer is registered to purchase aviation gasoline free of tax, and the vendor obtains certification of such fact satisfactory to the department prior to making the sale;
(34) “Governmental agency” means a department of a local, state or federal government, where such department is organized by and accountable to the authority of the executive, legislative, or judicial branch of that government; but does not include a private organization, association, or contractor, whether for profit or not, unless specifically identified in this chapter. For the purpose of this chapter, “governmental agency” includes a rescue squad chartered by the state as a nonprofit corporation or association and that is a member of the Tennessee Association of Rescue Squads, and a volunteer fire department chartered by the state as a nonprofit corporation or association;
(35) “Gross gallons” means the total measured product, exclusive of any temperature or pressure adjustments, considerations or deductions;
(36) “Heating oil” means a motor fuel that is burned in a boiler, furnace, or stove for heating or industrial processing purposes;
(37) “Highway vehicle” means a self-propelled vehicle that is designed for use on a highway;
(38) “Import” means to bring petroleum products into this state by any means of conveyance other than in the fuel supply tank of a motor vehicle. In applying this definition, the delivery of petroleum products into this state from outside Tennessee by or for the vendor constitutes an import by the vendor, and the delivery of petroleum products into this state from outside Tennessee by or for the purchaser constitutes an import by the purchaser;
(39) “In this state” means the area inside the boundaries of Tennessee, but does not include the midstream of waterways that border the state;
(40) “Invoiced gallons” means the gallons actually billed on an invoice from a vendor;
(41) “K-1 kerosene” means burner fuel designed for unvented space heaters which meets ASTM standard D-3699, in effect on January 1, 1995, and any successor rule, as the specification for K-1 kerosene;
(42) “Kerosene” has the same meaning as defined by the ASTM standards for kerosene;
(43) “Liquid” means any substance that is liquid at temperatures in excess of sixty degrees Fahrenheit (60°F) and at a pressure of fourteen and seven-tenths pounds per square inch (14.7 p.s.i.) absolute;
(44) “Local transit company” means a person that is a scheduled, common carrier, public passenger, land transportation service, serving regular routes within a municipality and the territory adjacent to the municipality, or within a metropolitan government created under title 7, chapters 1-3, and that generates at least sixty percent (60%) of the total passenger fare from such routes; provided, that the operation is supervised, regulated, and controlled as a street railway company, under [former] § 65-16-101 [repealed], and all legislative and statutory provisions applicable thereto;
(45) “Local transit service” means service furnished by a local transit company;
(46) “Motor fuel” means gasoline, diesel fuel and blended fuel;
(47) “Motor fuel transporter” means a person who transports motor fuel by transport truck, railroad tank car, marine vessel or pipeline;
(48) “Motor vehicle” means a vehicle that is propelled by an internal combustion engine or motor and is designed to permit the vehicle's use on highways. “Motor vehicle” does not include:
(A) Farm machinery, including machinery designed for off-road use but capable of movement on roads at low speeds;
(B) A vehicle operated on rails; or
(C) Machinery designed principally for off-road use, unless such machinery is licensed to operate on Tennessee highways;
(49) “Permissive supplier” means any person who is not subject to the general taxing jurisdiction of this state, but who:
(A) Is a position holder in a federally qualified terminal located outside this state;
(B) Is registered under § 4101 of the Internal Revenue Code (26 U.S.C. § 4101) for transactions in taxable motor fuels in the bulk transfer/terminal distribution system; and
(C) Acquires product in such out-of-state terminals from position holders in transactions that otherwise qualify as two-party exchanges;
(50) “Person” means a natural person, partnership, firm, association, corporation, limited liability company, court appointed representative, state, political subdivision or any other entity, group, or syndicate;
(51) “Petroleum products” means all benzol, gasoline, burning oil, distillate, fuel oil, gas oil, kerosene, naphtha, or any other volatile substance, excluding propane, reflecting a gravity of sixteen degrees (16°) or above on the American Petroleum Institute (API) scale; with the exception of those substances with a kinematic viscosity greater than seventy (70) centistokes at one hundred twenty-two degrees Fahrenheit (122°F) and a flash point greater than one hundred fifty degrees Fahrenheit (150°F); produced from petroleum, natural gas, oil shale or coal, by whatever trade name known, or substitutes therefor, including fuel alcohol, sold or used or stored in this state, separately or in combination, for any purpose whatever, by any user or storer, whether or not manufactured in this state;
(52) “Position holder” means the person who holds the inventory position in petroleum products in a terminal, as reflected on the records of the terminal operator. A person holds the inventory position in petroleum products when that person has a contract with the operator for the use of storage facilities and terminaling services for petroleum products at the terminal. “Position holder” includes a terminal operator who owns petroleum products in the terminal;
(53) “Public highway” means the entire width between boundary lines of each public-maintained way in this state, including streets and alleys in cities and towns, when any part of the way is open to the public use for vehicle travel;
(54) “Qualified terminal” means a qualified terminal as defined under the Internal Revenue Code, regulation and practices, that has been assigned a terminal control number (TCN) by the internal revenue service;
(55) “Rack” means a mechanism for delivering motor fuel from a refinery, terminal, or bulk plant into a railroad tank car, a transport truck or another means of bulk transfer outside of the bulk transfer/terminal system;
(56) “Refiner” means a person that owns, operates, or otherwise controls a refinery within the United States;
(57) “Refinery” means a facility used to produce motor fuel from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons, and from which motor fuel may be removed by pipeline, by marine vessel, or at a rack; provided, that “refinery” also means a facility used to produce fuel alcohol;
(58) “Removal” means any physical transfer other than by evaporation, loss, or destruction, of petroleum products from a terminal, manufacturing plant, customs custody, pipeline, marine vessel (e.g., barge or tanker), refinery or any receptacle that stores petroleum products;
(59) “Retail station” means any service station, garage, truck stop or other outlet dispensing motor fuel from a container equipped with a computer-type pump that measures fuel passing through it;
(60) “Retailer” means a person that engages in the business of selling or distributing petroleum products to the end user within this state through a retail station;
(61) “State” means the state of Tennessee;
(62)
(A) “Supplier” means a person that meets all the following conditions:
(i) Is subject to the general taxing jurisdiction of this state;
(ii) Is registered under § 4101 of the Internal Revenue Code (26 U.S.C. § 4101) for transactions in taxable motor fuels in the bulk transfer/terminal system; and
(iii) Is one (1) of the following:
(a) Is the “position holder” in a terminal or refinery in this state, or is one who receives fuel or fuel alcohol from a position holder within a terminal or refinery in this state;
(b) Imports taxable petroleum products into this state from a foreign country;
(c) Acquires taxable petroleum products from a terminal or refinery outside this state for import into this state on such person's account;
(d) Produces fuel alcohol or alcohol derivative substances in this state; or
(e) Is the receiving supplier on a two-party exchange;
(B) A terminal operator shall not be considered a “supplier” merely because the terminal operator handles taxable petroleum products consigned to it within a terminal. When used in this chapter, other than in this section, “supplier” shall be deemed to also refer to the term “permissive supplier” unless provided otherwise;
(63) “Tank wagon” means a straight truck having multiple compartments designed or used to carry petroleum products;
(64) “Taxable motor fuel” means gasoline, diesel fuel, kerosene, and blends thereof, and any other substance blended with any of these fuels;
(65) “Terminal” means a storage and distribution facility for taxable motor fuel, supplied by pipeline or marine vessel, that is registered as a qualified terminal by the internal revenue service;
(66) “Terminal bulk transfer” means a transfer of petroleum products in any of the following instances:
(A) Marine barge movements of fuel from a refinery or terminal to a refinery or terminal;
(B) Pipeline movements of fuel from a refinery or terminal to a refinery or terminal;
(C) Rail movements of fuel from a refinery or terminal to a refinery or terminal;
(D) Book transfers of product within a terminal between suppliers prior to completion of removal across the rack; or
(E) Two-party exchanges between licensed suppliers within a terminal;
(67)
(A) “Terminal operator” means a person that:
(i) Owns, operates, or otherwise controls a terminal; and
(ii) Does not use a substantial portion of the taxable motor fuel that is transferred through or stored in the terminal for its own use, i.e., for its own consumption or in the manufacture of products other than motor fuel;
(B) A terminal operator may own the taxable motor fuel that is transferred through or stored in the terminal;
(68) “Transmix” means the buffer or interface between two (2) different products in a pipeline shipment, or a mix of two (2) different products within a refinery or terminal that results in an off-grade mixture;
(69) “Transport truck” means a semi-trailer combination rig or tank wagon designed or used for the purpose of transporting petroleum products over the highways;
(70) “Transporter” means any operator of a pipeline, barge, railroad or transport truck engaged in the business of transporting petroleum products;
(71) “Two-party exchange” means a transaction in which a petroleum product is transferred from one licensed supplier or licensed permissive supplier to another licensed supplier or licensed permissive supplier pursuant to an exchange agreement:
(A) Which transaction includes a transfer from the person that holds the inventory position for taxable motor fuel in the terminal as reflected on the records of the terminal operator; and
(B) The exchange transaction is completed prior to removal of the product from the terminal by the receiving exchange partner;
(72) “Undyed diesel fuel” means diesel fuel not dyed under United States environmental protection agency rules for high sulfur diesel fuel nor dyed under internal revenue service rules for low sulphur fuel, nor pursuant to any other requirements subsequently set by the environmental protection agency or internal revenue service;
(73) “Vehicle fuel supply tank” means any receptacle on a motor vehicle designed to supply fuel for the propulsion of the motor vehicle or from which fuel is supplied for the propulsion of the motor vehicle;
(74) “Vessel” means a barge or other marine conveyance used to transport petroleum products in bulk; and
(75) “Wholesaler” means a person who acquires petroleum products from a supplier, importer or from another wholesaler, for subsequent sale and distribution at wholesale by tank cars, transport trucks or vessels.
(a) Subject to exemptions provided in part 4 of this chapter, a privilege tax is imposed upon all gasoline, fuel alcohol and substitutes therefor, imported into the state; the tax being levied when the product first comes to rest in the state. The tax shall also be imposed on all gasoline or substitutes therefor refined, manufactured, produced, or compounded in this state, and thereafter sold, stored or distributed in this state. The tax imposed by this section shall be collected and paid at those times, in the manner, and by those persons specified in this chapter. The rate of the tax imposed by this section shall be:
(1) On or after July 1, 2017, through June 30, 2018, twenty-four cents (24¢) per gallon;
(2) On or after July 1, 2018, through June 30, 2019, twenty-five cents (25¢) per gallon; and
(3) On or after July 1, 2019, twenty-six cents (26¢) per gallon.
(b) No fuel shall be included in the measure of the tax liability under this section unless it shall have previously come to rest within the meaning of the commerce clause of the Constitution of the United States.
(a) Subject to exemptions provided in part 4 of this chapter, and except as provided in subsection (c), a use tax is imposed upon all diesel fuel and all fuel other than gasoline that is suitable for use in a diesel-powered vehicle or that is used or consumed in this state to produce power for propelling motor vehicles; it being the purpose and intent of this section that the taxes being levied on taxable motor fuels under this chapter are in fact a levy and assessment on the consumer, and the levy and assessment on other persons as specified in this chapter are as agents of the state for the collection of such tax. The rate of the tax imposed by this section shall be:
(1) On or after July 1, 2017, through June 30, 2018, twenty-one cents (21¢) per gallon;
(2) On or after July 1, 2018, through June 30, 2019, twenty-four cents (24¢) per gallon; and
(3) On or after July 1, 2019, twenty-seven cents (27¢) per gallon.
(b) The tax imposed by this section shall be collected and paid at those times, in the manner, and by those persons specified in this chapter.
(c) Notwithstanding subsection (a), diesel fuel that is indelibly dyed in accordance with internal revenue service regulations and is legal for exempt use only shall not be considered subject to the diesel tax imposed under this section, except when used by a commercial carrier to produce power for a means of transportation, as defined in the Transportation Fuel Equity Act, compiled in part 14 of this chapter, in which case a use tax of seventeen cents (17¢) per gallon is imposed on such fuel.
Subject to exemptions provided in part 4 of this chapter, in addition to the taxes imposed on motor fuels in §§ 67-3-201 and 67-3-202, a special privilege tax of one cent (1¢) per gallon is imposed on all petroleum products. The tax imposed by this section shall be collected and paid at those times, in the manner, and by those persons specified in this chapter.
Subject to exemptions provided in part 4 of this chapter, in addition to the taxes imposed on petroleum products in §§ 67-3-201 — 67-3-203, an environmental assurance fee as provided in § 68-215-110 is imposed on all petroleum products. The fee imposed by this section shall be collected and paid at those times, in the manner, and by those persons specified in this chapter.
An export tax of one-twentieth of one cent (⁄ of 1¢) per gallon is levied upon all of the petroleum products, subject to the special privilege tax provided at § 67-3-203, which are stored in this state, or have come to rest after shipment in interstate commerce and are stored in this state, and are subsequently exported to points outside of this state. If with respect to these petroleum products the special privilege tax has already been paid, then nineteen-twentieths (⁄) of the special privilege tax may be credited on a monthly return, or in the alternative, refunded.
Notwithstanding any law to the contrary, if the federal government reduces or eliminates any or all taxes imposed by title 26 of the United States Code and allocated by chapter 98 of that title of the federal highway trust fund (26 U.S.C. § 9501 et seq.), the existing state tax imposed on the sale and/or use of such products shall be adjusted so as to maintain the amount of funding for the Tennessee department of transportation generated by the federal tax. The adjustment in the state tax shall become effective simultaneously with the reduction in the federal tax. The department of revenue is directed to collect such taxes and allocate such taxes in their entirety, less the appropriate cost of administration, to the state highway trust fund for use by the department of transportation. If the federal government elects to increase any or all taxes imposed by title 26 of the United States Code and allocated by chapter 98 of that title to the federal highway trust fund after it has reduced or eliminated such taxes, the state tax on the sale and/or use of such products is reduced equal to the amount of the increase by the federal government. No amounts of revenue received pursuant to this section shall be pledged specifically to the payment of debt service on any state bond or note.
The tax imposed by § 67-3-201 on taxable gallons imported into this state by a licensed importer shall be measured and levied at the time the product first comes to rest in this state. On a product refined, produced, or compounded in this state, the tax shall be measured and levied on any finished product when first placed into storage for sale or use. For a product removed from a qualified terminal or refinery outside this state, destined for this state under a tax precollection election provided in § 67-3-503, the tax shall be measured and levied at the time the product is removed across the terminal rack of such out-of-state facility, as if the product were imported and came to rest in this state.
(a) The tax imposed by § 67-3-202 shall be measured by taxable gallons removed, other than through a bulk transfer, by a licensed supplier:
(1) From the bulk transfer/terminal system or from a qualified terminal or refinery within this state;
(2) From the bulk transfer/terminal system or from a qualified terminal or refinery outside this state for delivery to a location in this state as represented on the shipping papers; provided, that the supplier imports such taxable motor fuel for the supplier's own account, or such supplier has made a tax precollection election under § 67-3-503;
(3) Upon sale in a qualified terminal or refinery in this state to an unlicensed supplier; or
(4) In other cases in the same manner as the tax imposed by § 4081 of the Internal Revenue Code of 1986 (26 U.S.C. § 4081) or the Code of Federal Regulations.
(b) With respect to the operator of a terminal in this state, the tax imposed by § 67-3-202 shall be measured and levied annually on taxable motor fuel by the amount by which net gallons lost or unaccounted for, including transmix, within the terminal exceed the sum of net gallon gains, plus one-half of one percent (0.5%) times the number of all net gallons removed from such terminal across the rack or in bulk.
(a) The tax imposed by § 67-3-203 and the fee imposed by § 67-3-204 on petroleum products shall be measured by gallons of petroleum products removed, other than through a bulk transfer, by a licensed supplier:
(1) From the bulk transfer/terminal system or from a qualified terminal or refinery within this state;
(2) From the bulk transfer/terminal system or from a qualified terminal or refinery outside this state for delivery to a location in this state as represented on the shipping papers; provided, that the supplier imports such taxable petroleum products for the supplier's own account, or such supplier has made a tax precollection election under § 67-3-503;
(3) Upon sale in qualified terminal or refinery in this state to an unlicensed supplier; or
(4) In other cases in the same manner as the tax imposed by § 4081 of the Internal Revenue Code of 1986 (26 U.S.C. § 4081) or the Code of Federal Regulations.
(b) Anything to the contrary notwithstanding, the special privilege tax and the environmental assurance fee on gasoline shall be measured and levied at the time the product first comes to rest in this state.
(c) With respect to the operator of a terminal in this state, the tax imposed by § 67-3-203 and the fee imposed by § 67-3-204, shall be measured and levied annually on petroleum products other than gasoline by the amount by which net gallons lost or unaccounted for, including transmix, within the terminal exceed the sum of net gallon gains, plus one-half of one percent (0.5%) times the number of all net gallons removed from such terminal across the rack or in bulk.
(a) The taxes and fees imposed by §§ 67-3-202 — 67-3-204, on the date of an increase in the tax rate, shall be applicable to previously taxed petroleum products in inventory held for sale by a wholesaler.
(b) The tax imposed by § 67-3-201, on the date of an increase in the tax rate, shall be applicable to previously taxed gasoline in inventory held by a supplier, bonded importer, importer or wholesaler, except inventory held at retail.
(c) The tax imposed by § 67-3-202 shall be applicable to all nonexempt inventory held by any person outside of the bulk transfer/terminal system in this state to the extent such inventory has not previously been subject to the tax imposed by this state under the predecessor motor fuel tax statute; provided, that no tax shall be payable with respect to dyed diesel fuel or fuel held by an exempt user, including governmental agencies described under § 67-3-401.
(d) Persons in possession of taxable petroleum products subject to this section shall take an inventory at the start of business on the date that the increased tax rate becomes effective and on January 1, 1998, to determine the gallons in storage for purposes of determining the taxes and/or fees; provided, that in determining the amount of taxable petroleum products taxes and fees due under this section:
(1) The person may exclude the amount of taxable petroleum products in dead storage;
(2) For the inventory taken on January 1, 1998, the person may exclude gallons on which taxes and fees at the full rate have previously been paid;
(3) The person may exclude gallons of dyed diesel fuel from the tax imposed by § 67-3-202 only; and
(4) The person shall report the gallons listed in this section on forms provided by the commissioner.
(e) Where gallons in taxable inventory have not previously been subject to the predecessor motor fuel tax statute, the amount of the inventory tax is equal to the tax rate times the gallons in storage, as determined under subsection (c). In the case of an increase in the tax rate, the inventory tax is equal to the new tax rate minus the previous tax rate times the number of gallons previously taxed.
(f) Payment of this floorstock tax shall be made in accordance with § 67-3-511.
(a) There shall be exempted from the taxes and fees imposed in part 2 of this chapter any governmental agency that holds an active exemption permit issued by the department.
(b) Each governmental agency making purchases of petroleum products shall, prior to the purchase of such products, acquire a valid exemption permit issued by the commissioner. The exemption permit shall be numbered and shall entitle such governmental agency to purchase petroleum products tax exempt for a period of four (4) years from the date of issuance. The permittee shall make application for renewal prior to the expiration of the permit.
(c) If any governmental agency, to which an exemption permit has been issued, loses its status as a governmental agency during the effective period of any such permit, the permit shall be void and shall be immediately surrendered to the department.
(d) In order to be entitled to the exemption, the governmental agency shall receive, store, handle and use the petroleum products strictly in the following manner:
(1) Purchase only from a licensed importer, supplier, or wholesaler;
(2) Store in a storage facility either owned or leased by such agency. In the event the facility is leased, it shall be separate and apart from the commercial storage facilities of any motor fuel vendor, and the storage facility must be kept under the exclusive control of the governmental agency at all times. In order for the leased facility to comply with this subsection (d), a copy of the lease must be filed with and approved by the commissioner;
(3) Remove from the storage facility in equipment either owned or leased by the governmental agency; and
(4) Use exclusively for governmental purposes, in equipment either owned or leased by the governmental agency and operated by governmental employees.
(e) It is unlawful for any person to use petroleum products sold to a governmental agency for any purpose other than governmental.
(f) For the purposes of this part only, a motor vehicle used exclusively in a driver education program approved by the state board of education shall be considered to have met the requirements of subdivision (d)(4).
(g) For the purposes of this part only:
(1) A motor vehicle used exclusively for the purpose of providing mass transportation services, paratransit service to or for the benefit of persons who are elderly or have a disability, or other specialized mass transportation services of a public transportation system or transit authority organized and existing under and by virtue of title 7, chapter 56, and operated by nongovernmental employees, shall be considered to have met the requirements of subdivision (d)(4); and
(2) Petroleum products stored by the governmental agency in a storage facility or tank leased by the governmental agency on the premises of a person providing the transportation services referred to in subdivision (g)(1), pursuant to contract with such public transportation system or transit authority, shall be considered to have met the requirements of subdivision (d)(2); provided, that such leased storage facility or tank shall be separate and apart from the other commercial storage facilities and tanks on the premises, and the leased storage facility or tank must be kept and maintained for the exclusive use and storage of petroleum products stored by the governmental agency for operation of such mass transportation services, paratransit service to or for the benefit of persons who are elderly or have a disability, or other specialized mass transportation services at all times, and for no other purpose.
(h) An independent contractor operating a local transit company and providing local transit services is exempt from the petroleum products taxes and fees imposed in part 2 of this chapter, subject to the same restrictions imposed on governmental agencies under this part.
(i) In lieu of the provisions set out in subdivision (d)(2), petroleum products may be delivered to a governmental agency through a customer-controlled pump. A licensed wholesaler may locate such pump or pumps at a location other than the wholesaler's primary storage location. A customer-controlled pump shall not be located on any retail station island. Such pump or pumps must be connected to a storage tank whose inventory is owned by the licensed wholesaler. Any licensed wholesaler found violating any statute or any rule promulgated by the commissioner relating to a customer-controlled pump shall lose the right to sell from a customer-controlled pump for a period of not less than two (2) years, and shall be subject to all other penalties set forth in the law. A person associated with a retail station shall neither take part in the dispensing or sale of petroleum products from such pumps, nor shall such person possess any key that will activate any meter that may be used for dispensing such products. A customer-controlled pump shall have the ability to identify each customer separately and only that customer shall be allowed to purchase petroleum products through that identity at the pump. One (1) invoice exclusively for sales from a customer-controlled pump shall be issued on the last day of any month in which a tax refund on sales to governmental agencies is claimed. Such invoice shall clearly identify itself as an invoice solely for sales through a customer-controlled pump.
(j) Notwithstanding any other provision of this part to the contrary, a governmental agency may purchase petroleum products from retail stations free of the taxes imposed in §§ 67-3-201 — 67-3-203, and free of the fee imposed in § 67-3-204. Such purchases may only be made through a fleet credit card or an oil company credit card which has been issued by the oil company to a governmental agency which holds an exemption permit issued by the commissioner pursuant to this part.
(k) Any governmental agency using, storing, distributing or selling petroleum products in any manner except strictly in accordance with this part:
(1) Shall be liable for the state petroleum products taxes and fees imposed in part 2 of this chapter. In the event of such liability, the taxes and fees shall be collected in the manner otherwise provided by law; and
(2) Shall be subject to revocation of its governmental agency exemption permit.
There shall be exempt from the taxes and fees imposed in part 2 of this chapter, taxable motor fuel acquired by an end user out of state, carried into this state in a vehicle fuel supply tank, and consumed from the same tank in which it was imported.
Industrial chemicals or solvents classified as volatile substances shall not be subject to the taxes or fees imposed in part 2 of this chapter when these industrial chemicals or solvents are neither intended for use nor used as fuels.
There shall be exempt from nineteen-twentieths (⁄) of the special privilege tax imposed by § 67-3-203, and from all other taxes and fees imposed in part 2 of this chapter, the following:
(1) All bulk exports of petroleum products; and
(2) All exports of petroleum products within the vehicle fuel supply tanks of locomotives and airplanes.
There shall be exempt from the taxes and fees imposed in part 2 of this chapter, with the exception of the export tax imposed by § 67-3-205, taxable petroleum products:
(1) Exported by a supplier; or
(2) Sold by a supplier to a person, who is licensed in this state, for immediate export to a state for which the destination state motor fuel tax has been paid to the supplier;
provided, that the supplier shall be licensed to remit tax to such destination state, and that the supplier shall maintain for inspection by the department satisfactory proof of export in the form of a terminal-issued, destination state shipping paper.
A licensed exporter shall be entitled to a refund of the taxes and fees previously paid on taxable petroleum products pursuant to part 2 of this chapter, with the exception of the export tax imposed by § 67-3-205, in the following instances:
(1) Where petroleum products were placed into storage in this state and were subsequently exported by transport truck or tank wagon by or on behalf of such licensed exporter; or
(2) Where petroleum products were exported by transport truck or tank wagon by or on behalf of such exporter in a diversion across state boundaries properly reported in conformity with § 67-3-806.
An unlicensed exporter shall be entitled to a refund of the taxes and fees previously paid pursuant to part 2 of this chapter, with the exception of the export tax imposed by § 67-3-205, on taxable petroleum products that were acquired by the unlicensed exporter and subsequently exported by transport truck or tank wagon by or on behalf of such exporter.
There shall be exempt from the tax imposed in § 67-3-202 all kerosene sold or used in the state for purposes other than in any motor vehicle or equipment operated on the public highways of this state. This includes K-1 kerosene sold at retail through dispensers that have been designed and constructed to prevent delivery directly from the dispenser into a vehicle fuel supply tank, and K-1 kerosene sold at retail through nonbarricaded dispensers in quantities of not more than twenty-one gallons (21 gals.) for use other than for highway purposes, under such rules as the department shall reasonably require. Quantities sold at retail stations, other than stated above, are subject to the diesel tax imposed in § 67-3-202.
There shall be exempt from the taxes imposed in §§ 67-3-201 and 67-3-202 taxable motor fuel sold for use in aircraft; provided, that the buyer must be registered to purchase jet fuel subject to federal taxes applicable to jet fuel, and the vendor must obtain certification of such fact satisfactory to the department prior to making the sale.
(a) None of the laws relating to the inspection of petroleum products as set forth in §§ 60-3-103 — 60-3-114, or the taxes and fees imposed by this chapter upon petroleum products, shall be applicable or collectible in the following cases:
(1) Upon any of the products while being transported from, inside or outside the state to a petroleum refinery inside the state, for the purpose of there being refined, further refined or processed;
(2) Upon any of the products while being refined, further refined, processed or stored at a petroleum refinery inside this state. Refinery exemptions are applicable to all petroleum activities, exchanges and transactions that are customarily performed by or engaged in by a refinery, but specifically excluded are exemptions applicable to the storage of petroleum or petroleum products for others, whether by lease or otherwise;
(3) Upon any of the products while being transported from a refinery inside this state to another petroleum refinery inside this state; and
(4) Upon any of the products while being transported from a petroleum refinery inside this state to a place outside this state, excluding commercial marine vessels, even though delivery is made in midstream of waterways constituting geographical boundaries of this state. For any product transported from refinery storage via marine vessel as an export, but in fact coming to rest at a nonexempt destination in this state, for which the taxes and fees are not reported and paid by a bonded importer, the refinery shall bear responsibility to this state for the payment of taxes, fees, and applicable interest and penalty.
(b) All refinery exemptions granted to petroleum refineries shall apply to refiners or manufacturers of fuel alcohol who have a refinery or a manufacturing facility in Tennessee.
(c) Where gasoline is exchanged or sold within the bulk transfer/terminal system between refiners who hold a bonded importer's license, the first transferee, after the gasoline is imported into this state, shall be primarily liable for the taxes and fees that have accrued pursuant to §§ 67-3-201, 67-3-203 and 67-3-204. With respect to a refinery, gasoline may be exchanged or sold tax free by a refinery within refinery-held storage; however, the transferee shall be liable for taxes and fees on gasoline that crosses the terminal rack; provided, that the refinery is responsible for the taxes and fees on gasoline that crosses the terminal rack that is not otherwise exchanged or sold within the refinery.
(d) For the purposes of the exemptions provided by this section, an entity, other than a retailer, affiliated with an entity which owns a refinery located in this state, shall be treated as the refinery and shall not be considered as the transferee. As used in this subsection (d), entities are affiliated with one another, if either, directly or indirectly wholly owns the other, or if the entities are directly or indirectly, wholly owned by a common parent.
(a) Any person who shall use any taxable gasoline for agricultural purposes as defined in part 1 of this chapter on which the gasoline tax has been paid shall be entitled to a refund of the gasoline tax except one cent (1¢) per gallon; but there shall be no refund of the special privilege tax on gasoline imposed under § 67-3-203 or the environmental assurance fee on gasoline imposed under § 67-3-204.
(b) No refund under this section shall be authorized, unless:
(1) A claim is submitted containing a declaration that it is made under the penalty of perjury and also containing all of the information that the commissioner may require, and filed with the commissioner either semiannually or annually, on or before April 15 and October 15 following the end of each semiannual period ending on the immediately preceding December 31 and June 30 respectively, or on April 15 of the following year if filed annually;
(2) Each purchase made is of fifty gallons (50 gals.) or more; and
(3) The amount of the refund payable is twenty-five dollars ($25.00) or more for any one (1) claim period.
(a) For petroleum products exported to points outside the state for resale, to obtain a refund, a claim for refund must be filed with the department within three (3) years from December 31 of the year in which the export activity occurred. The claimant is entitled to recover all taxes and fees paid as levied in part 2 of this chapter, excepting the export tax imposed by § 67-3-205. Bonded importers and suppliers, instead of filing a claim, may seek credit on the distributor report; provided, that the credit is supported by automated, terminal-issued shipping papers establishing intent to export. The bonded importer or supplier may take credit for a sale to an export customer where that customer is charged the destination state's tax; provided, that the customer is a licensed exporter in Tennessee.
(b) For diesel fuel that is exported to points outside the state, in vehicle fuel supply tanks of diesel locomotives or marine tows, where such is consumed in such locomotives or marine tows outside the state, the user may apply for refund of the special privilege tax imposed by § 67-3-203, less the export tax imposed by § 67-3-205, and may apply for refund of the environmental assurance fee, imposed by § 67-3-204, by submitting a claim for refund within ninety (90) days of the last day of the month in which the export was made. If a credit is being claimed for such products exported for consumption, it shall be claimed on a report filed within the same ninety-day period.
(c) For aviation fuels that are exported to points outside the state, including aviation gasoline and jet fuel that is stored in the state, but is carried outside the state in the vehicle fuel supply tanks of airplanes owned or leased by commercial air carriers, for consumption in such airplanes outside the state, such user may apply for refund of the special privilege tax less the export tax, and may apply for refund of the environmental assurance fee, using the same procedure and time requirements as set forth in subsection (b).
(1) A licensed wholesaler who has paid any taxes and fees due under §§ 67-3-201 — 67-3-204, may apply for a refund of taxes or fees paid on any petroleum products subsequently sold free of tax to a governmental agency holding an exemption permit issued by the commissioner. A licensed supplier or importer may claim a credit on the distributor report for any taxes or fees paid on any petroleum products sold free of tax to a governmental agency, or may in the alternative file for a refund.
(2) For sales of petroleum products made to governmental agencies from retail stations, the licensed wholesaler, supplier or importer may apply for refund or claim a credit on behalf of a retail vendor.
(b)
(1) An application for refund or credit shall be filed with the commissioner, on forms prescribed by the commissioner, on or before the last day of the second month following the month in which the exempt sales were made. All sales in any month on which a refund is due shall be included in one (1) application for refund.
(2) After January 1 and no later than June 30 of any year, a licensed wholesaler, importer or supplier may apply for refund under subsection (a) for any exempt sales made during the previous calendar year on which a claim for refund has not previously been made. Only one (1) such omnibus claim shall be permitted. Such an omnibus claim is designed to allow claimants to secure refunds on items previously omitted on claims filed under subdivision (b)(1). No extension of time to file this omnibus claim shall be allowed.
(c) Applications for refund or credit shall contain all information as required by the commissioner. In addition, all applications must be accompanied by copies of all invoices for sales on which the licensee is applying for refund or claiming a credit. The invoices submitted with any such application shall each contain the exemption permit number for the governmental agency to which the sales were made. The commissioner may allow computer documentation instead of invoices.
(d)
(1) Any application for refund submitted to the department that does not comply with any of the provisions set out in subsections (b) and (c) shall not be approved and a refund shall not be granted.
(2) Licensed wholesalers, importers or suppliers shall not be entitled to a refund on sales made to any person who does not hold a valid governmental agency exemption permit at the time of such sale.
(e) Applications for refund made pursuant to this section shall not be subject to § 67-1-707.
(a) Any person using gasoline or undyed diesel fuel for truck refrigeration or cement mixing, where the gasoline or undyed diesel fuel is delivered into a container or fuel tank that is equipped or designed to supply only the internal combustion engine used exclusively for truck refrigeration or cement mixing, and where tax has been paid, shall be entitled to a refund of the tax imposed under §§ 67-3-201 and 67-3-202 except one cent (1¢) per gallon.
(b) Any person using fuel for the generation of power to operate a mobile self-propelled rock drill; a motor vehicle and an auxiliary unit used for concrete mixing; for boom, pneumatic, or pump unloading; on which the gasoline tax or diesel tax has been paid, or on which the tax is payable by a limited user, shall be entitled to a refund, or a reduction of taxes imposed according to the following formula:
(1) For concrete mixers and concrete pumpers, forty percent (40%) of the tax;
(2) For pneumatic unloaders, ten percent (10%) of the tax;
(3) For boom unloaders, ten percent (10%) of the tax;
(4) For pump unloaders, the tax on two and one-half gallons (2.5 gals.) for each unloading where the pump is actually used; and
(5) For mobile self-propelled rock drills, ninety percent (90%) of the tax.
(c) No refund shall be authorized unless an application, executed under penalty of perjury and containing such information as the commissioner may require, is filed with the commissioner. No refund shall be authorized unless the amount due in refund is fifty dollars ($50.00) or more in a semiannual period. Refund applications must be filed semiannually and within ninety (90) days following the end of June and December of the semiannual period in which the fuel was used.
Where taxable diesel fuel has been accidentally contaminated by dye, the owner of the product may file a claim for refund for the diesel tax paid on the undyed fuel.
A refund of the tax imposed by §§ 67-3-201 and 67-3-202 covering loss of gallonage due to fire, flood, storm, theft or other causes over which a vendor has no control will be made if the loss is reported to the commissioner within three (3) business days of the date of the loss, except that losses not exceeding one thousand gallons (1,000 gals.) need not be reported. With respect to all losses, the vendor shall file with the commissioner a written claim and statement explaining the occurrence of the loss within sixty (60) days of the time of loss. Negligence or any unlawful act, such as overloading a transport vehicle, excessive speed or other like act by a vendor or such vendor's agent, that is contributory to a loss, shall invalidate the claim.
The special privilege tax imposed by § 67-3-203 shall be refundable to the user of such petroleum products as are shown to be used directly in fabricating or processing tangible personal property for resale. There is expressly excluded from this section any use for the purpose of space heating, illumination, or the operation of internal combustion engines. The refund may be claimed on a monthly basis before the expiration of thirty (30) days following the month for which such refund is to be made.
When an end user uses undyed diesel fuel as heating oil or for other nonhighway purposes, the end user may apply for a refund of the diesel tax imposed by § 67-3-202. The end user shall not be entitled to a refund, if the end user is a commercial carrier who used the undyed diesel fuel to produce power for a means of transportation or if any other law precludes the end user from applying for a refund. The claim for refund for the diesel tax may be filed at the end of each calendar quarter but no later than one (1) year from the date of last purchase represented in the claim. The minimum amount of such claim is two hundred fifty dollars ($250). Supporting documentation shall be submitted with the claim as the commissioner may require. If the minimum is not met in one (1) quarter then it can be attached to and used in subsequent quarters, but not to exceed two (2) years.
There shall be exempt from the taxes imposed in §§ 67-3-201 and 67-3-202 and by chapter 6 of this title methanol sold for use in highway or nonhighway vehicles that is not composed of or blended with gasoline, diesel fuel, or other fuels or petroleum products.
(a) A licensed wholesaler who sells tax-paid motor fuel to a limited user or a prepaid user as defined in § 67-3-1302 shall be entitled to a refund of the tax paid pursuant to § 67-3-202. Any claim for refund filed with the commissioner must be supported by documentation that sets forth the name, address, account number and federal employer identification number or social security number of the customer, together with the invoice or delivery ticket number and number of gallons sold. The claimant may file one (1) claim each month and otherwise be subject to the statute of limitations provided in § 67-3-421.
(b) The licensed wholesaler's entitlement to a refund is not affected by the status of the customer's limited user permit or prepaid user authorization, unless the wholesaler knows, has been notified by the department, or in the exercise of reasonable care should know, that the customer is not entitled to use the permit or authorization with respect to a particular purchase of fuel.
(a) To claim a refund under this part, a person must present to the department a statement that contains a written verification that the claim is made under penalty of perjury and lists the total amount of taxable petroleum products subject to refund. The claim must be filed not more than three (3) years after the date the taxable petroleum products were purchased by the claimant; however, this statute of limitations shall not prevail if a statute of limitations already exists for a particular refund provision. The statement must show that payment for the purchase has been made and the amount of taxes and fees paid on the purchase have been remitted.
(b) The commissioner has the authority to require the claimant to provide adequate documentation to support the claim. The department may make any investigations it considers necessary before refunding the taxes or fees to a person and in any case may investigate a refund after the refund has been issued and within the time frame for making adjustments to tax under this title.
(a) Any manufacturer who shall use any taxable gasoline, on which the gasoline tax has been paid, in the manufacture of a premixed engine fuel containing gasoline and oil, sold in containers of one gallon (1 gal.) or less and produced for use in two-cycle engines and not for use in the propulsion of an aircraft, vessel or other vehicle, shall be entitled to a refund of gasoline tax paid under § 67-3-201 except one cent (1¢) per gallon; but there shall be no refund of the special privilege tax on gasoline imposed under § 67-3-203 or the environmental assurance fee on gasoline imposed under § 67-3-204.
(b) The claim for refund filed pursuant to this section may be filed at the end of each calendar quarter but no later than one (1) year from the date of the last purchase represented in the claim. The minimum amount of such claim is two hundred fifty dollars ($250). Supporting documentation shall be submitted with the claim as the commissioner may require. If the minimum is not met in one (1) quarter, then the claim amount can be carried over to and used in subsequent quarters, but not for longer than a total period of two (2) years.
Except as otherwise provided in this part, the taxes imposed by §§ 67-3-201 — 67-3-203, and the fee imposed by § 67-3-204, on taxable petroleum products measured by gallons removed from the terminal rack, shall be paid by the licensed permissive supplier, if the supplier has entered into a blanket precollection election as provided in § 67-3-503, or if the supplier has entered into an agreement with a customer whereby Tennessee petroleum products taxes and fees are levied on the sale of fuel to that customer. The taxes and fees are due on or before the twentieth day of the month following the month of removal, unless such day falls on a weekend or state or banking holiday, in which case the taxes and fees are due the next succeeding business day.
Except as otherwise provided in this part, the taxes and fees imposed by part 2 of this chapter on taxable petroleum products measured by gallons imported from another state shall be paid by the licensed bonded importer who has imported such products. The taxes and fees shall be paid on or before the twentieth day of the month following the month of import, unless such day falls on a weekend or state or banking holiday, in which case the taxes and fees are due the next succeeding business day. However, if the supplier has made a blanket election to precollect tax under § 67-3-503, the supplier is jointly and severally liable with the bonded importer for the taxes and fees, and shall remit to the department on behalf of the bonded importer under the same terms as a supplier payment under § 67-3-504.
(a) A licensed supplier or licensed permissive supplier may make a blanket election with the department to treat all removals of petroleum products from its out-of-state terminals, with a destination in this state shown on the terminal issued shipping paper, as if such removals of gasoline were imported and came to rest in Tennessee, and removals of petroleum products other than gasoline were removed across the terminal rack in this state, for taxation purposes under part 2 of this chapter.
(b) This notice of election shall be made on forms provided by the department.
(c) The department shall release a list of electing suppliers under subsection (b) upon request by any person. Disclosure of this information by the department shall not constitute a violation of any confidentiality requirement imposed by chapter 1, part 17 of this title.
(d) The absence of an election by a supplier under this section shall not relieve the supplier of responsibility for remitting the taxes and fees imposed by this chapter. However, the responsibility of the supplier shall be limited to the supplier's own imports into this state.
(e) Any supplier who makes the election provided by this section shall precollect the taxes and fees imposed by this chapter on all removals from a qualified out-of-state terminal on its account without regard to:
(1) The license status of the person acquiring the petroleum product from such supplier;
(2) The point or terms of sale; or
(3) The character of delivery.
(f) Each supplier who elects to precollect taxes and fees under this section agrees to waive any defense that the state lacks jurisdiction to require collection on all out-of-state sales by such person, where such person had knowledge that such shipments were destined for this state. Such supplier also agrees to waive any defense to the state's assertion of its general police powers to regulate the movement of petroleum products.
(a) The taxes and fees on petroleum products imposed by §§ 67-3-202 — 67-3-205 shall be collected and remitted to the state by the supplier, as agent for the wholesaler who removes taxable gallons from the terminal racks. The supplier responsible for the tax payment and the wholesaler who removes the taxable fuel from the rack shall be identified in the terminal operator records.
(b) The supplier who has out-of-state terminals and who has entered into a blanket precollection election under § 67-3-503 shall also remit gasoline tax imposed by § 67-3-201 on products originating at out-of-state terminals destined for Tennessee.
(c) All taxes and fees accrued by the supplier with respect to gallons removed on such supplier's account during a calendar month shall be due and payable on or before the twentieth day of the month following the month of activity, unless such day falls on a weekend or state or banking holiday, in which case the taxes and fees are due the next succeeding business day.
(a) The terminal operator of a terminal in this state is jointly and severally liable for the taxes and fees imposed under §§ 67-3-202 — 67-3-204, and shall remit payment to the department upon discovery of either of the following conditions:
(1) The supplier and/or bonded importer with respect to the taxable petroleum products is a person other than the terminal operator and is not licensed; provided, that the terminal operator shall be relieved of liability if the terminal operator establishes all of the following:
(A) A valid terminal operator's license issued for the facility from which the petroleum product is withdrawn;
(B) An unexpired notification certificate from the supplier as required by the department or the internal revenue service; and
(C) No reason to believe that any information on the certificate is false; or
(2) In connection with the removal of diesel fuel that is not dyed and marked in accordance with internal revenue service requirements, the terminal operator provides any person with a bill of lading, shipping paper, or similar document indicating that the diesel fuel is dyed and marked in accordance with internal revenue service requirements.
(b) The terminal operator is jointly and severally liable for the taxes and fees imposed under §§ 67-3-202 — 67-3-204 that are not allocable to any licensed supplier, and shall remit the taxes and fees due with the annual report required under § 67-3-702(d); provided, that no taxes and fees shall be due if the terminal operator can establish by evidence acceptable to the commissioner that the gallons lost were diesel fuel dyed prior to receipt by that terminal operator. No collection allowance or deductions shall be allowed with respect to payment of these taxes. In the event the gallons lost or unaccounted for exceed five percent (5%) of the gallons removed from that terminal across the rack, a penalty of one hundred percent (100%) of the taxes and fees otherwise due shall be paid by the terminal operator with the taxes and fees due.
(a) Each licensed supplier and bonded importer who sells taxable petroleum products shall collect from the purchaser the taxes and fees imposed in part 2 of this chapter.
(b) At the election of a licensed wholesaler, the licensed supplier or bonded importer may not require payment of taxes and fees imposed in part 2 of this chapter from such wholesaler earlier than the second preceding day prior to the date on which the taxes and fees become finally due and payable to the state. This election shall be further subject to a condition that the supplier or importer may require the wholesaler to make remittances of all amounts of taxes and fees due by electronic funds transfer. The wholesaler's election under this subsection (b) may be terminated by the supplier or importer, if the wholesaler does not make timely payments to the supplier or importer as required by this subsection (b).
(a) A licensed supplier or bonded importer is entitled to a credit, against taxes payable under this part, for any tax or fee not paid to the supplier or importer by a licensed wholesaler, who has made a valid election under § 67-3-506(b) and whose election, at the time of the delivery of product giving rise to the unpaid tax or fee, had not been terminated by the supplier or importer, by operation of subsection (c), or by the commissioner under subsection (d). The credit must be claimed on the return within sixty (60) days following the failure of the wholesaler to make the required payment to the supplier or importer.
(b) Not later than fifteen (15) days after the earliest date on which the wholesaler that made the election provided for in § 67-3-506(b) was required to make the payment, the supplier or importer shall notify the department in writing of the default. The notice shall include the name of the defaulting wholesaler, the amount of the default, whether the supplier or importer has terminated the wholesaler's election, and the date of any termination.
(c) If the wholesaler does not make payment to the supplier or importer within twenty (20) days of the original due date set out in § 67-3-506(b), the wholesaler's election, with respect to the supplier or importer suffering the default, is terminated as of the following day.
(d) Upon notification from an importer or supplier to the department that a wholesaler has defaulted in payment, the commissioner may terminate the wholesaler's election with respect to all importers and suppliers and notify any and all importers and suppliers of such action.
To the extent a supplier, a permissive supplier, or a bonded importer timely remits taxes in accordance with this chapter, such person shall be allowed to retain one-tenth of one percent (0.1%) of the taxes imposed by §§ 67-3-201 and 67-3-202 to cover the costs of administration imposed by this chapter, including reporting, audit compliance, dye injection, and shipping paper preparation.
(a) A supplier, permissive supplier or bonded importer is entitled to an allowance covering loss of gallonage by evaporation, handling, unloading, shrinkage, and losses resulting from unknown causes, and as reimbursement for expenses incurred on behalf of the state in furnishing a bond, maintaining records, collecting taxes, and preparing reports and remittances in compliance with this part.
(b) The allowance shall be an amount equivalent to one and five thousand four hundred fifteen ten-thousandths percent (1.5415%) of the amount of tax imposed by §§ 67-3-201 and 67-3-202 shown to be due on the monthly report filed with the commissioner. The allowance may be taken as a credit on the monthly report.
(c) There shall be submitted with the report, in support of the deduction, the certificate of the supplier or bonded importer that, with respect to the gallonage sold or distributed within this state, during the period covered by the report, there was paid or credited to each wholesaler to whom any part of the gallonage was sold or distributed, an amount equivalent to one and five thousand four hundred fifteen ten thousandths percent (1.5415%) of the taxes applicable to the gallonage; and to each retailer to whom any part of the gallonage was sold or distributed, an amount equivalent to one-half of one percent (0.5%) of the taxes applicable to the gallonage. If a supplier has made a blanket election to precollect the tax under § 67-3-503 and remits the tax on behalf of a bonded importer, then the allowance shall be credited to the bonded importer. If it is determined that a supplier or bonded importer has not credited the proper allowance to another supplier or bonded importer or to the wholesaler or retailer, the tare allowance received by the supplier or importer shall be disallowed.
(d) Any wholesaler who receives the allowance from a supplier or importer shall credit to the retailer an amount equivalent to one-half of one percent (0.5%) of the taxes applicable to the gallonage. If it is determined that a wholesaler has not credited to the retailer the proper allowance, the allowance received by the wholesaler will be disallowed.
(e) Any person required to pay the taxes shall preserve and make available for inspection by a representative of the department all invoices and credit memoranda reflecting payments or credits to purchasers of the amounts of the allowance provided by this section. These records shall be preserved for a period of not less than three (3) years from December 31 of the year in which issued.
(a) Backup taxes and fees equal to the taxes and fees imposed by part 2 of this chapter are imposed on the end user of taxable petroleum products, and shall be administered in accordance with regulations promulgated by the department. End users, including governmental agencies, the American Red Cross, bus operators, and any other person exempted from the full federal highway tax, unless such person is otherwise exempt under part 4 of this chapter, are liable for the taxes and fees upon the delivery into the fuel supply tank of a highway vehicle:
(1) Any diesel fuel that contains a dye;
(2) Any taxable petroleum products on which a claim for refund has been made; or
(3) Any petroleum products on which taxes and fees have not previously been imposed by this chapter.
(b) Where taxes and fees imposed by this chapter have not been paid, the wholesaler or end user of taxable petroleum products shall be jointly and severally liable for the backup taxes and fees imposed by subsection (a), if the wholesaler or user knows or has reason to know that the petroleum products are being or will be consumed in a nonexempt use.
(a) The floorstock tax report required by § 67-3-304(d)(4) shall be accompanied by payment of the floorstock tax calculated in accordance with § 67-3-304(d) and (e) and payment made on or before the due date of that report. The floorstock tax imposed on inventory held outside of the bulk transfer/terminal system on January 1, 1998, reportable under § 67-3-304 shall be payable in two (2) equal annual installments. The first installment shall be due on or before the twenty-fifth day of the month following the month in which this part becomes effective, and the second installment is due on the same date of the following year.
(b) For any floorstock tax due following an increase in the tax rate on petroleum products, the floorstock tax imposed on inventory shall be payable within twenty-five (25) days of the end of the month in which the increase becomes effective.
(c) A supplier, bonded importer, importer, or wholesaler shall, for increases in the gasoline tax, remit tax, pursuant to subsection (a) or (b), based upon all inventory as provided in § 67-3-304(d) held in storage at the start of business on the effective date of the increase. All inventory held at retail stations and by end users shall be exempt from this requirement.
(d) A supplier, bonded importer, importer or wholesaler shall, for increases in the diesel tax, the special privilege tax or the environmental assurance fee, remit taxes and/or fees, pursuant to subsection (a) or (b), based upon all inventory as provided in § 67-3-304(d) held outside the bulk transport/terminal system at the start of business on the effective date of such increase. All inventory held at retail stations and by end users shall be exempt from this requirement.
(e) Regardless of any § 67-3-509 allowance already taken with respect to this inventory, an additional § 67-3-509 allowance may be taken.
Each person blending untaxed materials, including blendstocks and additives, with taxable petroleum products as to which taxes and fees have already been paid or accrued, shall remit the taxes and fees imposed by this chapter on the previously untaxed volumes. Should the blending process alter the specifications of the blended product according to American Society for Testing and Materials (ASTM) specifications, then applicable taxes and fees shall apply to the altered product.
(a) Holders of an exporter's license shall pay or accrue the destination state's tax, if any, to their suppliers. In the event that a licensed exporter diverts taxable petroleum products removed from a terminal in this state from an intended destination outside this state, as shown on the terminal issued shipping papers, to a destination inside this state, such exporter, in addition to compliance with the notification provided for by § 67-3-806, shall notify and pay the taxes and fees imposed under part 2 of this chapter to the department upon the same terms and conditions as if the exporter were a bonded importer without deduction for the allowances provided by §§ 67-3-508 and 67-3-509.
(b) In the event that an exporter removes from a bulk plant in this state taxable petroleum products as to which the taxes and fees imposed by this chapter have previously been paid or accrued, such exporter may apply for and the state shall issue a refund of such taxes and fees, except the export tax, upon a showing of proof of export satisfactory to the department in conformity with § 67-3-802, net of the allowances provided by § 67-3-509.
(c) All licensed importers shall otherwise report and pay the taxes and fees, in the manner provided by § 67-3-502, on diversions into this state of imported product; provided, that no § 67-3-509 allowances shall be deducted with respect to diverted shipments.
(d) In the event of a legal diversion from a destination in this state to another state, § 67-3-804 shall apply, and an unlicensed exporter diverting the product shall first pay taxes and fees on the fuel before exporting such fuel, and may apply for a refund from this state for the taxes and fees paid, less the § 67-3-509 allowance.
(e) In the event that a state involved in a cross-border shipment has entered into a multi-state compact with this state, the diverter shall pay or seek refund only upon the difference in state taxes with notice to both states upon proof shown of payment to the actual destination state. The department shall establish procedures for making this adjustment and prepare a list of those states that meet these criteria.
The taxes and fees imposed by this chapter on petroleum products shall be included in the sales price, for the purpose of determining sales price under the Retailers' Sales Tax Act, compiled in chapter 6 of this title, for calculating any applicable sales or use tax, even though the taxes and fees may be separately stated by the vendor.
(a) The commissioner may require the taxpayer to make payments as provided in this part by means of electronic funds transfer.
(b) However, anything to the contrary notwithstanding, if the taxpayer reports by electronic data interchange pursuant to § 67-3-706, payment shall be made by means of electronic funds transfer in accordance with § 67-1-703, regardless of the amount of tax owed. Payment shall be by Automated Clearing House Debit (ACH debit) or Automated Clearing House Credit (ACH credit) or by any other means established by the commissioner.
(a) A person engaged in business in this state as a supplier as defined in part 1 of this chapter shall first obtain a supplier's license.
(b) Any person who desires to collect the taxes and fees imposed by this chapter and who meets the definition of a permissive supplier may obtain a permissive supplier's license. Application for or possession of a permissive supplier's license shall not in itself subject the applicant or licensee to the jurisdiction of this state for any purpose other than administration and enforcement of this chapter.
Persons, other than licensed suppliers or licensed bonded importers, who export petroleum products to another state shall either pay Tennessee petroleum products taxes and fees to their suppliers or obtain a Tennessee exporter's license. Persons who hold a supplier's license or a bonded importer's license shall have the same privileges and responsibilities as those holding an exporter's license.
Any person who is not licensed as a supplier, exporter or importer shall obtain a transporter's license before transporting petroleum products, by whatever manner from a point outside this state to a point inside this state, from a point inside this state to a point outside this state, or from a refinery in this state, if the person is engaged for hire.
(a) A person importing taxable petroleum products into this state from outside this state, by transport truck, pipeline, barge or other conveyance, shall first obtain a bonded importer's license or a restricted importer's license, but not both.
(b) Applicants for a restricted importer's license must meet the following conditions:
(1) The taxable petroleum products imported must all be the subject of a tax precollection agreement with a supplier as provided in § 67-3-501, or a tax precollection election as provided in § 67-3-503; and
(2) The applicant must declare the state or states in which licensed for motor fuel tax purposes and from which the applicant desires to import, and shall declare the terminal source and the supplier. A restricted importer's license shall be limited to petroleum products imported from a state listed on the license application.
(c) The department shall determine that a particular state has adopted terminal reporting requirements that are adequate to facilitate information exchange on cross-border movements of petroleum products prior to granting restricted importer's licenses to applicants for importation of taxable petroleum products from that state.
(d) A person desiring to import taxable petroleum products from another state, and who has not obtained a restricted importer's license and has not entered into an agreement to prepay this state's petroleum products taxes and fees to the supplier or permissive supplier with respect to such imports shall:
(1) Obtain a valid bonded importer's license subject to the bonding requirements of this chapter; and
(2) Comply with the payment requirements under § 67-3-502.
Any person engaged in business in this state as a wholesaler as defined in part 1 of this chapter, who does not hold a license as a supplier or bonded importer, shall first obtain a wholesaler's license. A person who acquires petroleum products from a supplier, importer or from another wholesaler, for the person's own account, may obtain a wholesaler's license; and such person thereby assumes the rights and responsibilities of wholesalers under this chapter.
(a) Each application for a license under this part shall be made upon a form prepared and furnished by the department. It shall be subscribed to by the applicant and shall contain such information as the department may reasonably require for the administration of this chapter, including the applicant' s federal employer identification number and, with respect to the applicant for an exporter's license, a copy of the applicant's license to purchase or handle taxable motor fuel in the specified destination state or states for which the export license is to be issued.
(b) The department may investigate each applicant for a license under this chapter. No license shall be issued if the department determines that any one (1) of the following exists:
(1) The application is not filed in good faith;
(2) The applicant is not the real party in interest;
(3) Any prior license of the real party in interest has been revoked for cause;
(4) Information on the application has been falsified, is fraudulent, is incomplete or the applicant has in any material way misrepresented the true facts;
(5) With respect to an exporter's license, the applicant is not licensed in the intended specific state or states of destination;
(6) The applicant, or any of the applicant's agents, officers or employees, has a prior conviction for motor fuel tax evasion in any state, federal or foreign jurisdiction; or
(7) Other reasonable cause for non-issuance exists.
(a) The application for a license under this part, or a permit under part 11 of this chapter, shall be accompanied by a bond, payable to the state of Tennessee, in the penal amount determined under subsection (b). The bond shall be void if the applicant pays to the commissioner all taxes and fees on petroleum products under this chapter, together with interest and penalties on the taxes and fees that accrue against the applicant.
(b) The penal amount of the bond shall be not less than the greater of one thousand dollars ($1,000) or three (3) times the amount of the tax required to be paid monthly by the person. The monthly amount shall be determined by averaging the tax over a period of six (6) months immediately preceding the execution of the bond. If a person has not been in business for a period of six (6) months, the penal amount of the bond shall be determined on the average monthly tax during the actual time the person has been engaged in business or on the estimated average monthly tax; however, the bond shall not be less than fifty thousand dollars ($50,000). The commissioner may, at any time, require an increase in the penal amount of the bond, if the commissioner deems such increase necessary to safeguard the revenues of the state, but in no event shall the bond exceed the sum of one million dollars ($1,000,000).
(c) A person required to execute more than one (1) bond, whether required in order to become a licensee or to be eligible for an exemption or refund under part 4 of this chapter, may combine the total amount of each of the bonds into a single bond, which shall be conditioned upon payment of all petroleum products taxes, fees, penalties and interest that may accrue against the person. The penal amount of any combination bond shall be determined in the manner provided in subsection (b), but shall in no case be less than three thousand dollars ($3,000) nor more than two million dollars ($2,000,000).
(d) Licensees who seek exemption or refunds under part 4 of this chapter and who do not accrue liability as suppliers and/or importers, instead of the provisions set out in subsection (b), shall post a minimum bond of one thousand dollars ($1,000). The commissioner may, at any time, require additional bond if the commissioner deems such bond necessary to safeguard the revenues of the state. In no event shall the bond exceed the sum of one million dollars ($1,000,000).
(e) If the required maximum penal amount of the bond in subsection (b) exceeds one hundred thousand dollars ($100,000) or if the required maximum penal amount of the bond in subsection (c) exceeds two hundred thousand dollars ($200,000), the commissioner may agree to reduce the penal amount of a bond, if the commissioner determines that any potential tax liability is otherwise adequately secured or protected, or if the commissioner determines that the past good filing and payment record of the taxpayer indicates that lowering the penal amount of the bond would not result in a substantially increased risk of loss to the state. The required maximum penal amount of the bond in subsection (b) may not, however, be reduced to an amount less than one hundred thousand dollars ($100,000), and the required maximum penal amount of the bond in subsection (c) may not be reduced to an amount less than two hundred thousand dollars ($200,000).
(f) The bond may be a corporate surety bond or a personal surety bond; and, in either event, it shall be signed by the applicant as principal. If a corporate surety bond is executed, it shall be signed as surety by an authorized surety company licensed to do business in this state.
(g) Instead of a personal or corporate surety on such bond required in subsection (a), the commissioner may allow the applicant to secure such bond by depositing collateral in the form of a certificate of deposit, or equivalent to a certificate of deposit, as accepted and authorized by the banking laws of Tennessee, that has a face value equal to the amount of the bond. Such collateral may be deposited with any authorized state depository designated by the commissioner.
(h) An applicant may execute a bond with personal surety approved by the commissioner. The personal surety or sureties shall own real estate within the state, free and unencumbered, and with the assessed value equal to three (3) times the amount of the average monthly tax payment. The bond shall be registered in the register's office of the county in which the property is located, and the taxpayer shall be liable for all registration fees. The state shall have a lien against the property superior to all other liens attaching after the registration, which may be enforced by levy on the property of the taxpayer and the taxpayer's surety, and by sale of the property as now provided by law. A personal surety bond shall be executed on forms furnished by the commissioner and shall contain a sworn certificate of the county trustee showing the assessed valuation of the real estate and that all ad valorem taxes on it are paid. In the event the property is located within an incorporated town or city, the information shall also be furnished by sworn certificate of the proper municipal official. The bond shall also contain an abstract of title of the real estate described in the instrument, showing the exact status of title to the property for the preceding ten (10) years, and the abstract of title shall be signed and sworn to by the county register.
(a) No wholesaler tax deferral election under § 67-3-506 is valid unless and until the licensed wholesaler files with the department a surety bond, in a form acceptable to the department, in the amount of two hundred fifty percent (250%) of the greatest monthly taxes and fees paid by the wholesaler through all of its suppliers and importers during the immediately preceding twelve (12) months. If a wholesaler has been in business less than twelve (12) months, the amount of the bond shall be determined in reference to the average monthly tax liability for the time the wholesaler has been engaged in business. The penal amount of the bond under this section shall not be less than fifty thousand dollars ($50,000). The bond shall indemnify the department against credits allowed licensed suppliers and importers under § 67-3-507.
(b) If the required penal amount of the bond in subsection (a) exceeds two hundred thousand dollars ($200,000), the commissioner may agree to reduce the penal amount of a bond, if the commissioner determines that any potential tax liability is otherwise adequately secured or protected, or if the commissioner determines that the past good filing and payment record of the taxpayer indicate that lowering the penal amount of the bond would not result in a substantially increased risk of loss to the state. The required penal amount of the bond in subsection (a) may not, however, be reduced to an amount less than fifty thousand dollars ($50,000).
(a) The commissioner may require a licensee to file a new bond with a satisfactory surety in the same form and amount, if:
(1) Liability upon the previous bond is discharged or reduced for any reason; or
(2) The commissioner determines that any surety on the previous bond becomes unsatisfactory.
(b) If the new bond is unsatisfactory, the commissioner shall cancel the license. If the new bond is satisfactorily furnished, the commissioner shall release, in writing, the surety on the previous bond from any liability accruing after the effective date of the new bond.
(c) If a licensee has a cash deposit with the commissioner and the deposit is reduced for any reason, the commissioner may require the licensee to make a new deposit equal to the amount of the reduction.
(a) If the commissioner determines that the amount of the existing bond or cash deposit is insufficient to ensure payment to the state of taxes, fees, penalty and interest for which the licensee is or may become liable, the licensee shall, upon written demand from the commissioner, file a new bond or increase the cash deposit. The commissioner shall allow the licensee at least fifteen (15) days to secure the increased bond or cash deposit.
(b) The new bond or cash deposit must meet the requirements set forth in this chapter.
(c) If the new bond or cash deposit required under this section is unsatisfactory, the commissioner shall cancel the licensee's certificate.
(a) If, at any time after the execution of any surety bond, the surety or sureties on the bond become insolvent, the commissioner may require the execution of a new bond with good and solvent surety in the same manner and with the same penalty as the bond being replaced. The bond shall be subject to the approval of the commissioner.
(b) Any person executing a bond under this part may, at any time prior to default under any existing bond, apply to the commissioner for leave to cancel the existing bond and file a new bond with a new surety.
(a) Sixty (60) days after making a written request for release to the commissioner, the surety of a bond furnished by a licensee is released from any liability to the state accruing on the bond after the sixty-day period. The release does not affect any liability accruing before the expiration of the sixty-day period.
(b) The commissioner shall promptly notify the licensee furnishing the bond that a release has been requested. Unless the licensee obtains a new bond that meets the requirements of this chapter and files with the commissioner the new bond within the sixty-day period, the commissioner shall cancel the license.
(c) Either the principal or surety may request the commissioner to cause an audit to be made of the books and records of the principal, and the audit shall be commenced within ninety (90) days from the date of the request. Upon completion of the audit, and if no additional taxes, fees, interest or penalty is shown to be due, or the additional sum is paid to the commissioner, then and thereafter, all liability of the surety on the bond shall cease and the surety shall be released. Any collateral deposited as security with the commissioner shall be released and returned to the person entitled to it. Any real estate that has been pledged as security for the bond shall be released by the commissioner by the execution of a release for that purpose, which may be recorded in the same manner as other releases are recorded. The commissioner may require the principal on the bond to furnish the form for a release.
No license is transferable to another person. For purposes of this part, a transfer of a majority interest in a business association, other than a publicly held corporation, including a corporation, partnership, trust, joint venture, limited liability company and any other business association, shall be deemed a transfer of any license held by such business association, and shall render the license void. Any substantial change in ownership of a business association, other than a publicly held business association, shall be reported to the department under rules prescribed by the department.
Each license shall be preserved and conspicuously displayed at the place of business for which it is issued. The department is authorized to waive this requirement for any class of licensee.
Whenever any person licensed to do business under this chapter relocates, discontinues, sells, or transfers the business, the license shall be void, and the licensee shall immediately notify the department in writing of the relocation, discontinuance, sale, or transfer. The notice shall give the date of the event, and if a sale or transfer of the business, the name and address of the purchaser or transferee. The licensee shall be liable for all taxes, fees, interest, and penalties that accrue or may be owing, and any criminal liability for misuse of the license, that occurs prior to issuance of the notice.
(a) Before denying an application for a license, the commissioner shall grant the applicant a notice of the proposed denial, including the reasons for such decision. After having the opportunity to cure any defects in the application, an applicant who does not agree with the commissioner's decision may file with the commissioner at Nashville a written claim requesting a hearing. The hearing shall be held under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. The request shall be made within ten (10) days following date of the commissioner's action.
(b) The commissioner may suspend or revoke a license for failure to comply with this chapter after at least ten (10) days, notice to the licensee and after a hearing, if requested by the licensee, pursuant to the Uniform Administrative Procedures Act.
Any person engaged in business in this state as a retailer as defined in part 1 of this chapter, who does not hold a license as a wholesaler, and who is in, or intends to engage in, the business of selling dyed diesel fuel to end users, shall first obtain a retailer's license under this chapter.
(a) For the purpose of determining the amount of taxes and fees due on motor fuel imported, sold, refined, or used in the state, every licensed supplier, permissive supplier and bonded importer shall file with the department, on forms prescribed and furnished by the department, a monthly distributor report. The department may require the reporting of any information reasonably necessary to determine the amount of taxes and fees due.
(b) The reports required by this section shall be filed on or before the twentieth day of the month following the month of activity.
(c) The distributor report required by this section shall include the following information with respect to billed gallons of taxable petroleum products, with the amounts stated and indicated as net gallons, or stated and indicated as gross gallons if unable to provide net gallons:
(1) Removal of gallons of petroleum products by the reporting supplier or importer from the bulk transfer/terminal system in this state as to which the taxes and fees imposed by this chapter have been collected or accrued;
(2) Removal of gallons of diesel fuel or heating oil from terminals in this state by the reporting supplier, tax exempt, as to which dye has been added in accordance with this chapter;
(3) Removal of gallons of petroleum products from terminals in this state by the reporting supplier or importer, tax exempt, for export from this state by that person where the proper petroleum products tax for the destination state has been collected or accrued at the time of removal from the terminal, sorted by state of destination;
(4) Removal of gallons of petroleum products from terminals in this state by the reporting supplier or importer, tax exempt or for which credit can be taken on the return, for export, where the proper petroleum products tax for the respective destination state has been collected or accrued at the time of removal from the terminal, sorted by state of destination;
(5) Total removals in this state;
(6) Removal of gallons of petroleum products from a terminal in a state other than this state by the reporting supplier or importer, for shipment into this state; and
(7) Such other information which the department determines is reasonably required to determine the liability under this chapter.
(d) Every licensed supplier, bonded importer or permissive supplier shall separately identify, in a written statement to the department with the distributor report, any removal from the bulk transfer/terminal system in another state by that supplier or importer to a person, other than a licensed supplier, permissive supplier or bonded importer, of gallons of taxable petroleum products, which gallons are destined for this state, as shown by the terminal issued shipping paper, where the taxes and fees imposed by this chapter have not been collected or accrued by such supplier or importer upon such removal.
(a) Each person operating a terminal in this state shall file monthly with the department a sworn statement of operations of each terminal within this state, including the information set out in subsection (b), on forms prescribed by the department. The department may require the reporting of any information it considers reasonably necessary in addition to that required under subsection (b).
(b) The monthly terminal report required by this section shall be filed on or before the last day of the month following the month of activity and shall include the following information for each terminal location in this state:
(1) Terminal code assigned by the internal revenue service;
(2) Total inventory at the terminal operated by the terminal operator;
(3) Schedules of receipts by shipment, including:
(A) Carrier name;
(B) Carrier federal employer identification number;
(C) Mode of transportation;
(D) Date received;
(E) Document number;
(F) Net gallons received; and
(G) Product type; and
(4) Schedules of removals by shipment, including:
(A) Carrier name;
(B) Carrier federal employer identification number;
(C) Mode of transportation;
(D) Destination state;
(E) Supplier responsible for reporting removal;
(F) Supplier federal employer identification number;
(G) Date removed from terminal;
(H) Document number;
(I) Net gallons; and
(J) Gross gallons;
provided, that in the event the internal revenue service provides a common system of assigning to carriers alpha-numeric codes instead of names, then this data will be required in lieu of carrier names.
(c) For purposes of reporting and determining tax liability under this chapter, every licensee shall maintain inventory records as required by the department.
(d) Each person operating a terminal in this state shall also file an annual report for each terminal within this state on forms provided by the department. The taxes and fees shall be paid and the report shall be filed for each calendar year on or before February 25 of the following year. The report shall include data as follows:
(1) The amount of monthly gains or losses, in net gallons;
(2) The total net gallons removed from the terminal in bulk during the calendar year;
(3) The total net gallons removed across the terminal rack during the calendar year;
(4) The amount of tax due calculated pursuant to §§ 67-3-302(b) and 67-3-303(c); and
(5) Such other information as the department considers reasonably necessary to determine the tax liability of the terminal operator under this chapter.
(a) A person licensed as an exporter shall file monthly reports with the department on forms prescribed and furnished by the department concerning the amount of taxable petroleum products exported from this state. The report shall be filed on or before the twentieth day of the month following the month of activity.
(b) The report shall contain the following information:
(1) Each and every shipment of taxable petroleum products acquired free of all states' petroleum products taxes, except the export tax imposed by § 67-3-205, at a terminal in this state for direct delivery outside of this state by the exporter;
(2) Each and every shipment of taxable petroleum products acquired free of this state's tax and fee at a terminal in this state for direct delivery outside of this state but as to which the destination state's petroleum products tax was paid or accrued to the vendor at the time of removal from the terminal;
(3) The gallons delivered to taxing jurisdictions outside this state from bulk plant storage, and the means of transport;
(4) The name and federal employer identification number of the person receiving the exported taxable petroleum products from the exporter;
(5) The date of each shipment;
(6) The carrier name, or alpha code, and carrier federal employer identification number; and
(7) A list of diverted shipments and payments of taxes and fees.
(c) The department may in addition require the reporting of any other information it considers reasonably necessary to the enforcement of this chapter.
(a) A person licensed as a transporter in this state shall file monthly reports with the department, on forms prescribed and furnished by the department, reporting the amount of taxable petroleum products transported within or across the borders of this state; provided, that transport truck operations exclusively within the state are not reportable except when transport operations originate at a refinery in this state. The report shall be filed within twenty-five (25) days after the end of the month in which delivery was made. The information shall include the following:
(1) The quantity imported by the carrier for delivery in this state or transported from a Tennessee refinery by the carrier for delivery in this state;
(2) The name and address of the supplier;
(3) The name and address of the customer receiving delivery;
(4) The date and the point of delivery;
(5) The description of the product delivered; and
(6) Any other information that may be required by the commissioner for the proper administration of this chapter.
(b)
(1) In case of delivery by barge, there shall be furnished, in addition to the information in subsection (a), the name and number of the barge, and the name and port of the towboat delivering the barge.
(2) In the case of delivery by tank wagon, or other motor vehicle, there shall be furnished, in addition to the information in subsection (a), the vehicle's license number.
(3) In case of delivery by tank car, there shall be furnished, in addition to the information in subsection (a), the car number and initials, and the capacity of the car.
(c) A carrier delivering petroleum products or substitutes for petroleum products to any person required to have a license under part 6 of this chapter who is known by the carrier not to have such license, shall immediately notify the department by facsimile of the delivery, if facsimile service is reasonably available; but if not, by the next quickest means available. The department shall furnish to the carriers a list of all persons holding licenses and shall supplement and amend the list periodically as licenses are issued or revoked.
(d) If a transporter fails to make the reports required by this section, the commissioner may assess a civil penalty of one thousand dollars ($1,000) for each violation.
(e) This section shall cease to be effective if the commissioner determines that substantially similar data is available from federal government sources, including a federal terminal report.
A person licensed as a blender shall file a monthly report with the department, on forms prescribed and furnished by the department, reporting the amount of any untaxed petroleum products, blend stocks, or additives blended in this state, and paying all applicable taxes and fees levied under this chapter which have not been previously paid. The report shall be filed on or before the twentieth day of the month following the month of activity.
(a) The commissioner may require those responsible for filing reports under this part to file such reports by means of electronic data interchange. All payments accompanying these reports shall be remitted by means of electronic funds transfer as required by § 67-3-515.
(b) In addition to any other penalty provided by law, the commissioner may assess on any person required to file reports by means of electronic data interchange a penalty, not to exceed five hundred dollars ($500), for each instance of reporting by any other means.
(a) A person operating a refinery, terminal or bulk plant facility in this state shall prepare an automated, machine-generated, shipping paper, and provide it to the driver of every transport truck receiving petroleum products into the vehicle storage tank; provided, that where a bulk plant is not equipped to provide a machine-generated paper, it shall manually prepare the shipping paper required by this section. The department may by regulation require shipping papers to meet tamper-resistant standards, and every manually prepared shipping paper shall contain a stamp indicating that the paper was prepared at the facility at which it was issued.
(b) Every shipping paper shall set out on its face:
(1) Identification by address of the terminal or bulk plant from which the petroleum products were removed;
(2) The date the petroleum products were removed;
(3) The type and amount of petroleum products removed, actual gallons and net gallons;
(4) The state of destination as represented to the terminal operator by the transporter, the shipper or the shipper's agent;
(5) A notation:
(A) With respect to diesel fuel acquired under claim of exempt use, indicating the fuel is “DYED DIESEL FUEL, NON-TAXABLE USE ONLY, PENALTY FOR TAXABLE USE” for the load or the appropriate portion of the load; or
(B) With respect to any other taxable petroleum products, indicating: “[supplier name] is responsible for [state name] motor fuel tax,” or any other notation acceptable to the department, that otherwise indicates that the diesel tax imposed by this chapter, or any petroleum products taxes imposed by the destination state other than Tennessee, have been paid to the supplier with respect to the entire load or the appropriate portion of the load; and
(6) Any other information reasonably required by the department for the enforcement of this chapter.
(c) Unless the supplier has first directed the terminal or refinery operator to make the statement on the supplier's behalf, no terminal or refinery operator shall imprint any statement on a shipping paper relating to petroleum products to be delivered to this state, indicating:
(1) Any supplier's liability for payment of the taxes and fees imposed by this chapter; or
(2) The tax-paid or tax-collected status of any petroleum products.
(d) A person operating a terminal or refinery, or operating a bulk plant equipped to provide machine-generated shipping papers, may manually prepare shipping papers as a result of extraordinary, unforeseen circumstances, that temporarily interfere with the operator's ability to issue automated, machine-generated, shipping papers; provided, that such operator shall, prior to manually preparing such papers, provide facsimile notice to the department, and the operator's employees shall add to such manually prepared papers, prior to removal of each affected transport load from the facility, a stamp indicating that the document was prepared at the facility. If the interruption has not been cured within twenty-four (24) hours, additional notice to the department shall be made.
(e) A person operating a refinery, terminal or bulk plant may load petroleum products, a portion of which is destined for sale or use in this state and a portion of which is destined for sale or use in another state or states. However, such split loads shall be documented by the operator by issuing shipping papers designating the state of destination for each portion of the product.
(f) A person operating a refinery, terminal or bulk plant shall post a conspicuous notice located near the point of receipt of shipping papers by transport truck operators, which notice shall describe in clear and concise terms the duties of the transport operator and retail dealer under §§ 67-3-802 — 67-3-805; provided, that the department may by rule or notice establish the language, type, style and format of the notice.
(g) The commissioner may assess a civil penalty in an amount equal to the taxes and fees on the product, without regard to any exemption or dye, or one thousand dollars ($1,000), whichever is greater, for each violation, against a person who fails to comply with this section.
(a) Each person transporting petroleum products in a transport truck upon the public highways of this state shall:
(1) Carry on board the shipping paper issued by the refinery operator, the terminal operator or the bulk plant operator of the facility where the petroleum product was obtained, whether within or without this state;
(2) Show and permit duplication of the shipping paper by any law enforcement officer or representative of the department, upon request, when transporting, holding or off-loading the products described in the shipping paper;
(3) Deliver products described in the shipping paper to a point or points in the destination state shown on the face of the shipping paper, unless the person or the person's agent does all of the following:
(A) Notifies the department or its nominee, before the earlier of removal from the state in which the shipment originated or the initiation of delivery, that the person received instructions after the shipping paper was issued to deliver the petroleum product to a different destination state;
(B) Receives from the commissioner a verification number authorizing the diversion; and
(C) Writes on the shipping paper the change in destination state and the verification number for the diversion;
(4) Provide a copy of the shipping paper to the wholesaler, retailer or other person who controls the facility to which the petroleum products are delivered; and
(5) Meet such other conditions or take such other actions as the department may reasonably require by regulation for the enforcement of this chapter.
(b) The department may in its discretion provide an advance notification procedure for documentation supporting the import of petroleum products where the importer is unable to obtain terminal-issued shipping papers that comply with this section.
(c) The commissioner may assess a civil penalty in an amount equal to the taxes and fees on the product, without regard to any exemption or dye, or one thousand dollars ($1,000), whichever is greater, for each violation, against a person who fails to comply with this section.
No retail vendor, bulk plant operator, wholesaler or bulk end user shall accept delivery of petroleum products into bulk storage facilities in this state, if that delivery is not accompanied by a shipping paper prepared in accordance with this part. The commissioner may assess a civil penalty in an amount equal to the taxes and fees on the product, without regard to any exemption or dye, or one thousand dollars ($1,000), whichever is greater, for each violation, against a person who fails to comply with this section.