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| TN Governor, Bill Haslam |
The Tennessee Business Tax has historically been imposed by local jurisdictions on activities conducted at places of business within the local jurisdiction. Thus, a place of business was required in the state, indeed in the local jurisdiction, to be subject to the tax. The Tennessee Department of Revenue is proposing changes to this tax to expand the base to include certain out-of-state businesses and to allow local governments to tax gross receipts earned outside of the local taxing jurisdcition. The attached link includes the proposed legislation, and the Department is seeking comments from interested taxpayers.
Entities that lease tangible property in Tennessee, deliver goods in the state in company-owned vehicles, provide services in Tennessee or sell goods in purely intrastate transactions but do not have business locations in the state will now be required under this legislation to report and pay a "state-level" business tax. The applicable sections of the bill to focus on is Section 15. Attention should also be focused on Section 13, which provides for the accompanying personal property tax credit that applies. The state has not expanded the credit to take into consideration potential property taxes paid.
The Commissioner of Revenue is seeking comments on the proposed legislation that also focuses on "television service providers" but provides no definition of such.
Constitutional issues with the existing tax, nor shortcomings in the applicable definitions are not addressed by this proposal.
