TAX HOLIDAY for BUSINESS? TN Small Businesses eligible for the ‚ÄúBusiness Tax Holiday‚ÄĚ

The Senate Tax Subcommittee has approved legislation sponsored by Senator Jim Tracy (R-Shelbyville) that gives Tennessee small businesses a “Business Tax Holiday.”  Senate Bill 1293would provide a refund for the total amount of state and local sales tax paid by small business owners to retailers for business purchases that occurred during any one continuous 24-hour period between January 1, 2014, and June 30, 2014.

“This legislation is similar to the annual Sales Tax Holiday that is enjoyed by consumers in August on back-to-school items and clothing,” said Senator Tracy.  “It simply gives much needed tax relief to our small businesses.”

How a business can receive a refund:

 

To receive a refund under this bill, a Tennessee small business must file a single application with the department of revenue by August 31, 2014.  The total amount of the refund may not exceed $5,000.  No purchases made using cash would be eligible for refund.

The bill applies to small businesses located in the state with total annual gross receipts of no more than $2 million averaged over a three-year period and that employs no more than 10 persons on a full-time basis. Those businesses under three years old may receive the refund if they have total gross receipts of no more than $2 million in the year immediately preceding application. If a business has been in operation for less than one year, such business must have projected total gross receipts of no more than $2 million for the year in which the application is made.

“Many small businesses have suffered over the past several years.  This legislation is a means to help them, while providing an economic incentive for them to invest in their business and the economic growth of our communities.”

Bill Summary (From General Assembly):

This bill entitles a Tennessee small business to a refund of the total amount of state and local sales tax paid by the Tennessee small business to one or more retailers for bona fide business purchases from such retailers that occurred during any one continuous 48-hour period between January 1, 2014, and June 30, 2014. The total amount of the refund may not exceed $5,000. No purchases made using cash would be eligible for refund under this bill. To receive a refund under this bill, a Tennessee small business must file a single application with the department of revenue by August 31, 2014. 

"Tennessee small business" means a business that is a continuing, independent, for profit business located in the state and that has total annual gross receipts of no more than $2 million averaged over a three-year period and employs no more than 10 persons on a full-time basis. If the business has not been in operation for three years, then the business must have total gross receipts of no more than $2 million in the year immediately preceding application for a refund under this bill. If a business has been in operation for less than one year, such business must have projected total gross receipts of no more than $2 million for the year in which the application is made. 

The department may assess a civil penalty of up to $25,000 against any person that knowingly files a false or fraudulent application for refund under this bill. Any person that is assessed such a penalty would be entitled to the present law remedies afforded taxpayers for disputed taxes, such as filing a suit with the chancery court.

All refunds under this bill would be paid from the state's general fund, and this bill would not reduce the amount of sales and use tax payable to local governments.

Source:

TN General Assembly
Senate Bill 1293

Darlene Schlicher, General Assembly Contact

 

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