§ 67-1-1803 — Jurisdiction - Certification of refunds - Attorneys' fees - Statute of limitation tolled - Appeals - Expedited proceedings

(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.

Legislative History

Amended by 2024 Tenn. Acts, ch. 950,s 18, eff. 5/10/2024. Amended by 2024 Tenn. Acts, ch. 950,s 6, eff. 5/10/2024. Amended by 2014 Tenn. Acts, ch. 854, s 10, eff. 1/1/2015. Acts 1986, ch. 749, § 7; 1991, ch. 402, § 1; 1992, ch. 952, § 9; 1994, ch. 956, § 1; 2007 , ch. 602, § 34; 2008 , ch. 1106, § 60; 2009 , ch. 530, § 102.