July 2, 2010
Certified Public Accountants
COMMENTS: These general bills may be viewed at www.legislature.state.tn.us/.
Key
P - Legislation
with an active status
– - Comments
PC - Link to Public Chapter
2010 budget
ü PC SB 3901 by Kyle/HB 3787 by M. Turner - –This is an Administration tax bill. We have tried to limit the summary to relevant sections of the bill.•
Amendment: Senate Amendment 14 rewrites this
bill and revises various tax-related provisions, as follows: SALES AND USE TAX
(1) (A) Generally under present law, sales and use tax applies to retail sales
and present law excludes sales for resale from the definition of retail sales.
This amendment specifies that "sale for resale" does not include the
following, so therefore they would be considered retail sales to which tax
would apply: (i) A sale of tangible personal property or software to a dealer
for use in the business of selling services; and (ii) A sale of services to a
dealer for use in the business of selling, leasing, or renting tangible
personal property or computer software. (B) This amendment also provides that
"sale for resale" does include the following items in the
circumstances described: (i) Repair parts or other property sold to a dealer if
such property is subsequently transferred to the customer in conjunction with
the dealer's performance of repair services, regardless of whether the dealer
makes a separately stated charge for such property; (ii) Installation parts or
other property sold to a dealer if such property is subsequently transferred to
the customer in conjunction with the installation of property that remains
tangible personal property following such installation, regardless of whether
the dealer makes a separately stated charge for such property; (iii) Mobile
telephones and similar devices sold to a dealer if such property is
subsequently transferred to the customer in conjunction with the sale of
commercial mobile radio services (CMRS), regardless of whether the dealer makes
a separately stated charge for such property; and (iv) Food or beverages sold
to hotels and other dealers that provide lodging accommodations if such food or
beverages are subsequently transferred to the customer in conjunction with the
dealer's sale of lodging accommodations to the customer, regardless of whether
the dealer makes a separately slated charge for such property. (2) Present law
exempts from sales and use tax tangible personal property or taxable services
sold, given, or donated to specified charitable organizations. This amendment
specifies that this exemption also applies to computer software or taxable
services so donated, in addition to tangible personal property. (3) This
amendment authorizes a community development financial institution to charge a
rate of interest not to exceed 24 percent. OTHER PROVISIONS (1) This amendment
clarifies that for business tax purposes, gasoline and diesel fuel sold at
wholesale is taxable under the rate applicable for classification 1(B). Under
present law it is listed under classification 1(A) and 1(B). (2) Under the
present law business tax provisions, personal property taxes are allowable as a
credit only to the extent that the property is located and taxed by the same
city or county as the taxpayer's principal domicile for business tax purposes.
This amendment revises this provision to instead provide that personal property
taxes are allowable as a credit only to the extent that the property is located
at the place of business covered by the return required by this part and the
property is taxed by the same city or county that levied the business tax. (3)
Under the present Hall income tax provisions, every corporation having
stockholders in this state must furnish to the commissioner a list of such
stockholders to whom dividends are paid, their last known addresses and the
amount of dividends paid. This amendment deletes this provision. (4) This
amendment clarifies, in regard to the present law provisions governing refunds
of estate tax owed to taxpayers due to changes in federal law, that the amount
of the refund plus interest will be paid to the taxpayer and that interest will
be paid in accordance with the general law provisions governing tax refunds made
by the department of revenue. Senate Amendment 15
creates a new credit to excise and franchise tax. Under this amendment, there
will be allowed against the sum total of the taxes imposed by the franchise and
excise tax laws a credit equal to 50 percent of the purchase price of
Brownfield property purchased in this state during the tax period covered by
the return for the purpose of a qualified development project. "Brownfield
property" means real property that is the subject of an investigation or
remediation as a Brownfield project under a voluntary agreement or consent
order pursuant to present law regarding the brownfield projects voluntary
cleanup oversight and assistance program. "Qualified development
project" means a project consisting of a capital investment of at least
$25 million, utilizing at least five acres of Brownfield property, or non-prime
agricultural property and having a business plan approved by the commissioner
of economic and community. The credit would apply against the excise and franchise
taxes, except that such credit, together with any carry-forward thereof, taken
on any franchise and excise tax return may not exceed 50 percent of the
combined franchise and excise tax liability shown by the return before the
credit is taken.
Status: Enacted
as Public Chapter 1134 (effective 7/1/2010)
Link to Public Chapter: http://state.tn.us/sos/acts/106/pub/pc1134.pdf
ü PC SB 3916 by Kyle/HB 3925 by Fitzhugh - Bond issuance. Authorizes the issuance and selling of interest-bearing bonds and bond anticipation notes in amounts not to exceed $271,800,000 for the purpose of providing funds to the Department of Finance and Administration and the Department of Transportation. (This is the bond bill.) (Part of Administration Package)
Fiscal Note: Dated:
February 19, 2010 Increase state expenditures - $30,600,000 - 1st year debt
service. $405,381,500 Over life of the bonds. $270,441,100 Principal.
$134,940,400 Interest. (Reflected in the Governor's FY10-11 Recommended
Budget).
Amendment: Senate amendment 1 deletes the
authorization for $77,700,000 in bonds of which the proceeds would have been
allocated to the Department of Finance and Administration for the purpose of
acquisition and implementation of a radio system and driver license issuance
system software and equipment.
Status: Enacted
as Public Chapter 1109 (effective 6/25/2010)
Link to Public Chapter: http://state.tn.us/sos/acts/106/pub/pc1109.pdf
ü PC SB 3917 by Kyle/HB 3926 by Fitzhugh - Index of appropriations - estimated growth in state economy. Authorizes the index of appropriations from state tax revenues for the 2010-2011 fiscal year to exceed the index of estimated growth in the state's economy by $11.5 million or 0.1 percent. (This is one of two spending cap bills. The other is SB 3918.) (Part of Administration Package)
Fiscal Note: Dated:
February 9, 2010 Other Fiscal Impact - Authorizes an increase in appropriations
from state taxes up to $11,500,000 for FY10-11.
Amendment: Senate amendment 1 deletes the
language of the original bill. Increases the amount by which state
appropriations from state tax revenues for FY10-11 may exceed the index of
estimated growth in the state's economy by $126,600,000 or 1.1 percent.
Status: Enacted
as Public Chapter 1110 (effective 6/25/2010)
Link to Public Chapter: http://state.tn.us/sos/acts/106/pub/pc1110.pdf
ü PC SB 3919 by Kyle/HB 3928 by Fitzhugh - Appropriations - FY 2009-2010 and FY 2010-2011. Makes appropriations for fiscal years 2009-2010 and 2010-2011. (This is the appropriations bill for the 2010 session.) (Part of Administration Package)
Amendment: Senate amendment 11 makes various
changes to the appropriations bill. (See TLS Online for budget document labeled
"House Finance Committee Budget Proposal 06/02/2010.")
Status: Enacted as Public Chapter 1108 (effective 7/1/2010)
Link to Public Chapter: http://state.tn.us/sos/acts/106/pub/pc1108.pdf
2010 property tax
ü PC SB 3052 by Woodson/HB 3232 by McCord - Government endeavors - broad caption. Requires the state board of equalization to provide citizens with requested public records by mail or "fax", rather than "telecopier".
Amendment: Senate amendment 2 allows hunting
signs to be posted at ingress and egress points instead of every 100 yards as
previously required.
Status: Enacted
as Public Chapter 1143 (effective 7/1/2010)
Link to Public Chapter: http://state.tn.us/sos/acts/106/pub/pc1143.pdf
2010 sales tax
ü PC SB 2616 by McNally/HB 2556 by Fitzhugh – Technical Corrections bill from Revenue.
Amendment: Senate Amendment 1 rewrites the
bill. Reduces the capital outlay component of the BEP formula by $14 per square
foot for K-4 classrooms and by $12 per square foot for other classrooms in
FY10- 11 and subsequent years with the intent that the state share of the BEP
formula not include growth in capital outlay. These provisions will not
preclude the appropriation of non-recurring funds to the BEP for distribution
to local education agencies through the BEP formula. Prohibits records or materials
received, developed, generated, ascertained or discovered during the course of
fulfilling a grant agreement between a public higher education institution and
the Department of Economic and Community Development from being public records.
Increases from 11 to 13 the members of the Douglas Henry State Museum
Commission and includes the Senate and House Finance, Ways, and Means Committee
Chairs. Changes the state employer matching of contributions to the plan
permitted under 401(k) of the Internal Revenue Code in FY10-11 and FY11-12 to
an amount, if any that is specifically prescribed in the general appropriations
act of each year. House Amendment 7
transfers all positions, resources, and functions of the Governor's Office of
Diversity Business Enterprise (GoDBE) from the Department of General Services
to the Procurement Office on October 1, 2011. Redefines "small
business" as "
Status: Enacted
as Public Chapter 1135 (effective 6/30/2010)
Link to Public Chapter: http://state.tn.us/sos/acts/106/pub/pc1135.pdf
2010 general bills
ü PC SB 3135 by McNally/HB 3169 by Curtiss - Tax refunds. Requires the commissioner of revenue to offset any state tax refunds that are owed to a taxpayer by the amount of any debt that the taxpayer owes to a state agency or to any person on whose behalf a state agency acts to collect a debt. The priority for any offsets under this bill will be: (1) State tax liabilities; (2) Child support due pursuant to alimony and child support; (3) Judgments and liens; and (4) Other debts. Requires the department of finance and administration to maintain an electronic database of debts owed to state agencies. Requires all state agencies to report debts owned and the satisfaction of such debts for purposes of keeping the database current. Authorizes criminal court clerks to participate in the database. A taxpayer who is subject to an offset will have an opportunity for a hearing before the offset is final. Under present law, 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, interest must be added to the amount of refund or credit due, beginning 45 days from the date the commissioner receives proper proof to verify that the refund or credit is due and payable. Under this bill, no interest will be due to a person who owes a debt to the state or owes a debt for which the state acts as the collector. Requires the commissioner of revenue to provide tax information to employees or officers of any state agency, if the tax information is necessary to assist the state in collecting debts that it is owed. Requires all taxpayers who seek a refund of taxes paid in error to verify under penalty of perjury that the taxpayer does not owe a debt to the state. Extends the period of time within which a taxpayer's claim for a refund must be decided, if the taxpayer is a debtor, from six months to one year. Extends the time within which a taxpayer who is a debtor can file suit for a refund following a denial of the taxpayer's claim from one year to two years. Makes the present law system of submitting asset disclosure forms to inmates mandatory rather than discretionary. Requires the attorney general and reporter to provide to the commissioner of finance and administration a report documenting the name of an inmate and the amount of any restitution that the inmate has been ordered to pay. Present law prohibits any person from drawing any money from the public treasury until all debts, dues, and demands owing by such person to the state are first liquidated and paid off, unless the commissioner of finance and administration determines that refusing to issue a warrant on the treasury in favor of such person would result in an interruption of essential services.
Fiscal Note: Dated:
February 22, 2010 Increase state revenue - exceeds $100,000/recurring. Increase
state expenditures - $166,000/one-time. $280,000/Recurring.
Amendment: House amendment 1 requires, if a
person is a debtor and is determined by administrative review as entitled to a
refund or credit of any tax collected or administered by the commissioner,
interest to be added to the amount or refund or credit due beginning six months
from the date the commissioner receives proof that the refund/credit is due,
rather than 45 days from the date of filing a claim for refund. Makes bill's
offsetting requirements applicable to refunds of $200 or more. Expands the
bill's priority for offsets on child support to also include child support due
pursuant to paternity, child custody and visitation, and juvenile courts and
proceedings. Removes bill's requirement that the department of finance and
administration maintain a centralized electronic database system of all debts
owed to state agencies, and instead requires the commissioner to notify state
agencies of claims filed. Clarifies that no state agency shall be required to
violate strict standards of confidentiality set forth in federal or state law.
Removes specific time periods within which the original bill requires claimants
must notify the department. Adds that the notice that a claimant provides must
also include a telephone number or other contact information. Requires the
commissioner of revenue to retain an administrative fee of two percent of the
amount of any debt to reimburse its costs of collecting the debt on behalf of a
claimant. House amendment 2 corrects two
typographical errors in amendment 1. Senate amendment 1
requires the Department of Correction to periodically resubmit the inmate
disclosure statement to inmates and to establish by rule the frequency with
which such form shall be resubmitted. Establishes an offset procedure for the
state to recover various debts owed to the state from taxpayers requesting tax
refunds of $200 or more. Requires taxpayers requesting tax refunds to complete
and submit a written report of debts to accompany the claim for refund; creates
a new Class A misdemeanor offense for reporting false information on such
report. Requires the Commissioner of Revenue to provide notification of receipt
to the State Treasurer and to claimants for timely filed claims for tax refunds
$200 or more. Requires the State Treasurer to verify to the Department of Revenue
(DOR) whether or not the requesting taxpayer is the owner of any unclaimed
property, for the purpose of offsetting state debts against any unclaimed
property that would otherwise be due to the taxpayer. Authorizes DOR to collect
a $5.00 fee for costs of debt collection. Senate amendment 2
corrects a typographical error. Requires a suit challenging the denial or
deemed denial of a claim for refund to be filed in the appropriate chancery
court of this state within one year from the date that the claim for refund was
filed with the Commissioner of Revenue.
Status: Enacted
as Public Chapter 1113 (effective 6/28/2010)
Link to Public Chapter: http://state.tn.us/sos/acts/106/pub/pc1113.pdf
ü PC SB 3234 by Gresham/HB 3334 by Harry Brooks - Establishes financial literacy program. Requires the department of the treasury to develop and administer a financial literacy program for the purpose of improving the financial literacy and education of the state's citizens. –Please note that this bill has an amendment added that creates ex officio panel and the CPAs get to make a recommendation.•
Amendment: House amendment 1 rewrites the
bill. Creates the Tennessee Financial Literacy Commission (TFLC) for the purpose
of raising funds, developing, managing, and implementing various programs
related to financial literacy. Authorizes the TFLC to organize as a non-profit
corporation. Specifies various powers, purposes and responsibilities of the
TFLC. Creates an eleven-member Board of Directors for the TFLC consisting of
three ex officio members and eight non-ex officio members. Requires the Board
to be attached to the Department of Treasury for all administrative purposes,
including fiscal and personnel operations. House amendment 2
makes changes to the appointment process of non-ex officio members. Specifies
that the speaker of the senate shall choose four members from a list of
individuals submitted by the TN Society of Certified Public Accountants board
of directors, TN Jump Start Coalition board of directors, TN Cash Advance
Association board of directors and the TN State Parent Teach Association board.
Specifies that the speaker of the house shall choose four members from a list
of individuals submitted by the TN Bankers Association board of directors, TN
Credit Union League board of directors, TN Consumer Finance Association board
of directors and the TN Education Association board of directors. Sunsets the
TFLC on June 30, 2012.
Status: Enacted
as Public Chapter 1097 (effective 6/23/2010)
Link to Public Chapter: http://state.tn.us/sos/acts/106/pub/pc1097.pdf
2009 business taxes
ü PC SB 231 by J. Haynes/HB 228 by Odom - Contribution to
the
Fiscal Note: Dated: February 16, 2009
Amendment: Senate amendment 2
adds a severability clause. Senate amendment 3
deletes the language of the original bill and adds new language that authorizes
a refund of state and local sales taxes on the retail sale of certain items of
tangible personal property when sold to a natural person who has received
disaster assistance through the FEMA. Eligible items include major appliances,
residential building supplies, and residential furniture as defined. Such items
must be purchased between May 1, 2010, and September 30, 2010. Requires all
such eligible items which are sold under the proposed refund to be utilized in
the person's primary residence for the purposes of restoration, repair, and
replacement or rebuilding due to disaster damage occurring between May 1, 2010,
and May 8, 2010. Authorizes the Department of Revenue to assess civil penalty
not to exceed $25,000 for reporting false information. Requires that all
refunds be paid from the General Fund. Makes declaration that nothing within
the amendment should be construed to reduce the amount of sales and use tax
payable to local governments. Creates a study committee to examine and make
recommendations regarding fiscal policy on the issue of natural disasters. Such
members of the study committee shall meet only during session of the General
Assembly and shall report its findings and recommendations to the General
Assembly by April 1, 2011, at which time the committee shall cease to exist. Senate amendment 4 changes
references of "funds from the American Recovery and Reinvestment Act of
2009" to "federal funds allocated to the state" in regards to
the wastewater facility and drinking water revolving loan funds.
Status: Enacted as Public Chapter
1114 (effective 6/29/2010)
Link to Public Chapter: http://state.tn.us/sos/acts/106/pub/pc1114.pdf