§ 67-6-710 — Collection and administration

(a) (1) In collecting and administering the tax levied under the authority of this part, the commissioner of revenue shall have the same powers as the commissioner has in collecting and administering the state sales tax. (2) Rules and regulations promulgated by the commissioner under §§ 67-1-102 and 67-6-402 shall be applicable to the tax levied under the authority of this part, and shall be binding on cities, counties, and towns, and interest and penalty for delinquencies shall be imposed equal to the rates provided in § 67-6-516 . (b) (1) The department of revenue shall collect such tax concurrently with the collection of the state tax in the same manner as the state tax is collected; provided, that the department has determined that such collection of the tax is feasible, and has promulgated rules and regulations governing such collection. (2) The department shall remit the proceeds of the tax to the county, city or town levying the tax, less a reasonable amount of percentage as determined by the department to cover the expenses of administration and collection. This percentage shall be one and one hundred twenty-five thousandths percent (1.125%). The percentage shall not be less than necessary to defray the state's expenses in administering, collecting, and remitting the local sales tax, as determined annually by the department and certified by the comptroller of the treasury. (c) The county, city or town shall furnish a certified copy of the adopting resolution or ordinance to the department of revenue in accordance with regulations prescribed by the department. (d) (1) Upon any claim of illegal assessment or collection, the taxpayer shall have the remedy provided in chapter 1, part 18 of this title, it being the intention of the general assembly that law which applies to the recovery of state taxes illegally assessed or collected be conformed to apply to the recovery of taxes illegally assessed or collected under the authority of this part. (2) The resolution or ordinance levying the tax shall designate the county or municipal officer against whom suit may be brought for recovery. (e) Proceeds of the taxes provided for in § 67-6-702(f) shall be distributed as follows: (1) Fifty percent (50%) shall be distributed as provided in [former] subsection (e) [See Compiler's Notes.]; and (2) Fifty percent (50%) shall be distributed to incorporated municipalities in the proportion that the population of each bears to the aggregate population of the state and to counties in the proportion the population of unincorporated areas of the county bears to the aggregate population of the state, according to the most recent federal census and other censuses authorized by law. Counties and incorporated municipalities shall use such funds in the same manner and for the same purposes as funds distributed pursuant to § 67-6-712 . (f) (1) Proceeds of the tax on sales of tangible personal property obtained from any vending machine or device as provided for in § 67-6-702 shall be distributed to the counties based on the ratio of local tax collections in the county under this section over total tax collections in all counties under this section. (2) The amount received by the county under subdivision (f)(1) shall be distributed first as provided for in § 67-6-712(a)(1) . The remainder shall be distributed to the cities or towns in the county based on the ratio of total collections in the municipality to total collections in the county. (g) (1) Notwithstanding any provision of law to the contrary, the commissioner, based upon reporting of exempt sales under § 67-6-393 and any other data or information the commissioner deems relevant, shall substantially reimburse counties and municipalities for the loss of local tax under this part resulting from the exemption provided by § 67-6-393 . The amount of the reimbursement shall be approximately equal to the aggregate amount of local tax that would have been collected under this part on the sale or use of goods otherwise taxable but for § 67-6-393 . (2) If the loss of local tax subject to reimbursement under this subsection (g) cannot be identified to a particular situs, the amount of the reimbursement shall be distributed to the counties based on the ratio of total local tax collections in the county under this part over the total local tax collections in all counties under this part. The amount received by the county under this subdivision (g)(2) shall be distributed first as provided for in § 67-6-712(a)(1) . The remainder shall be distributed to each municipality in the county based on the ratio of total collections in that municipality over the total collections in the county and shall be distributed to the county based on the ratio of total collections in the unincorporated portions of the county over the total collections in the county. (3) Notwithstanding any provision of § 67-6-103 to the contrary, the distribution required by this subsection (g) shall be made from state sales tax collections prior to distribution under § 67-6-103 ; provided, however, that no portion of the revenue derived from the increase in the rate of sales and use tax from six percent (6%) to seven percent (7%) contained in chapter 856, § 4 of the Public Acts of 2002 shall be distributed pursuant to this subsection (g). All such revenue shall continue to be allocated as provided in chapter 856 of the Public Acts of 2002. (h) On or before January 1, 2023, and on or before January 1 of each subsequent year, the department shall submit a report to the finance, ways and means committees of the senate and the house of representatives outlining the actual costs incurred by the department for the administration and collection of the local option sales tax levied pursuant to this part.

Legislative History

Amended by 2022 Tenn. Acts, ch. 858, s 1, eff. 4/14/2022. Amended by 2021 Tenn. Acts, ch. 285, s 2, eff. 4/30/2021. Amended by 2019 Tenn. Acts, ch. 157, s 1, eff. 4/23/2019. Amended by 2019 Tenn. Acts, ch. 491, s 3, eff. 10/1/2019. Acts 1999, ch. 406, § 14; 2002, ch. 719, § 10; 2003 , ch. 355, § 46; 2003 , ch. 357, § 68; 2004, ch. 592, § 9; 2004, ch. 959, §§ 27, 68; 2005, ch. 311, §§ 1, 2; 2005, ch. 398, § 3; 2006, ch. 1019, § 45; 2007 , ch. 602, §§ 51, 120, 167, 168, 187; 2009 , ch. 530, §§ 35, 48; 2011 , ch. 72, §§ 1, 14; 2013 , ch. 480, § 1; 2015 , ch. 273, § 3.