Tennesse Tax Tribunal Bill Deferred to 2014

      Legislation (HB961/SB734) to establish an independent tax tribunal to resolve disputes between Tennessee taxpayers and the Tennessee Department of Revenue has been deferred to the 2014 legislative session by the House Government Operations Committee.

      The legislation, sponsored by Sen. Bo Watson and Rep. Jon Lundberg, was based in large part on the ABA Modal Tax Tribunal Act and would have established an independent tax resolution system similar to tax tribunals recently approved in Georgia, Illinois, and Maine. Alabama looks poised to enact a tax tribunal in its current legislative session.

       Under current law, tax disputes involving the Tennessee Department of Revenue, including assessments based on audits, can be reviewed by the Informal Hearing Office of the Department if the taxpayer appeals the assessment.

       Taxpayers that disagree with the Informal Hearing Office may proceed to Chancery Court, and taxpayers seeking a refund must similarly pursue denied refund claims in Chancery Court. 

       As originally introduced, the Tax Tribunal Act would have replaced the Chancery Court proceeding with a full-time Tax Tribunal, and appeals would have proceeded from the Tax Tribunal directly to Tennessee’s appellate courts.  The bill likely will be amended to offer the taxpayer the option to appear before the Tax Tribunal while preserving the avenue to file suit in Chancery Court.

       The Tax Tribunal is being championed by the National Federation of Independent Business. “The goal is to offer Tennessee taxpayers, small and large, an independent, less costly forum for appeals,” said Jim Brown, Tennessee State Director of the NFIB, noting as many as 35 states have similar appeals functions. “It’s important to our members and supporters to know they have received a fair, impartial hearing.”

        “We will continue to work closely with the taxpaying community and other interested parties to incorporate suggested improvements and address remaining concerns before presenting a revised proposal to the legislature in 2014.”

         No fiscal note was issued on the legislation.