Comptroller Questions Farr’s Revenue Rulings; Farr Says It’s Just Politics

Former Revenue Commissioner Reagan Farr approved 20 multimillion-dollar tax reductions for Tennessee businesses without proper documentation or justification, according to a report released this week by the state comptroller that The Tennessean characterizes as “blistering.
Farr approved some of those reductions, known formally as tax variances, despite objections from his own staffers. Still others were given the green light without the knowledge of senior staff, according to the report. (Link to letter HERE)
Tax variances are granted after corporations contest their tax bills with the state. Under state law, the revenue commissioner may issue such variances without oversight by other state agencies.
Because the variances pertain to a business’s private affairs, details, such as the names of the companies and the amounts of the tax reductions, were not released in the report.
Farr, who was appointed by former Democratic Gov. Phil Bredesen, disputed the report’s findings and said politics, not tax policy, led to Republican Comptroller Justin Wilson’s critical report.
During Farr’s tenure from 2007 to 2010, there were 20 tax variances granted. Under his predecessor, Bredesen appointee Loren Chumley, 13 variances were approved over four years. From 2000 to 2003, only six variances were approved.
Wilson said the practice ballooned during Farr’s time in office and that there was a lack of documentation to back up the variances.
“The commissioner of revenue made decisions involving millions of dollars for which we could find no documentation, no rationale, no formal analysis and no evidence of investigation of the effect of such a variance on a similarly situated taxpayer,” Wilson said.
Farr defended his record and said each variance came with the approval of the department’s legal counsel, or the special counsel to the commissioner. Farr, who is now the chief operating officer of a solar energy startup company called Silicon Ranch, said he did not believe his tax policies were to blame for the critical report.
“I do think this is more about politics than policy,” Farr said.
Wilson said the report was focused solely on the tax practices of the Revenue Department.

See also the Chattanooga Times-Free Press story.

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