Tag Archives: rulings

Bredesen Backs Farr (over ‘crew trying to do you in’)

Former Gov. Phil Bredesen said Tuesday he believes the people who disagreed with former Revenue Commissioner Reagan Farr “got their final shot in” against Farr with a recent comptroller’s report that criticized the department on tax variances. (Prior post HERE.)
That’s one part of Mike Morrow’s TNReport on Bredesen, hereby excerpted:
Bredesen said he has not read the report from Comptroller Justin Wilson but has talked briefly about it with Farr and that he has never had any questions about Farr’s integrity.
…Bredesen said his contact with Farr about the comptroller’s report lasted only about 30 seconds.
“He told me about it. I said, ‘That’s fine. You know the crew over there that was trying to do you in got their final shot in. There’s now a report. Fine,'” Bredesen said.
Bredesen said he never had any particular problems with what Farr did.
“He had a department which was very politically divided internally about the way it should operate,” Bredesen said. “This department has always had a group of people who thought, ‘Our job is tax collection, period. What we need to do is audit returns and collect taxes, and that’s the end of it.’
“But you’ve also got people that say, ‘No, no, no, tax policy and the way you do things is part of the process of the department. It’s part of economic development.’ Reagan was in that mode. I think the people that disagreed with him kind of got the final shot in there. I’ve never had any questions about his integrity or decision-making process.”

On Those ‘Byzantine and Often-Conflicting’ Tax Rulings Recently Released

Chas Sisk has done a revealing review of recently-released rulings by the state Department of Revenue, deemed to be “shedding new light on the byzantine and often-conflicting rules that taxpayers face.”
Sometimes bizarre, counterintuitive and seemingly arbitrary, the rulings illustrate just how critical tax questions can be to businesses.
In recent months, the Department of Revenue has told a country club that it has to tax lockers. But a fitness club does not, provided it offers services like racquetball.
Revenue lawyers have also told a company that makes an injection that eliminates smile lines that its product is tax-free because users can get it only by prescription. Sunscreen remains taxable, they add.
And revenue officials have told a firm that it must collect sales taxes on its shop drawings because it prints them out. The drawings do not have to be taxed if the firm leaves them on computers.
“You know, I’ve had members calling me up about that,” said Jim Brown, state director of the National Federation of Independent Business. “There’s no question there is some complexity” in the state’s sales tax laws.
The Department of Revenue has so far released 23 so-called “private rulings” this summer.
The rulings let taxpayers — usually businesses — get a decision from the Department of Revenue up front about complex or ambiguous aspects of the state’s tax laws. Each ruling is supposed to apply only to the taxpayer that asks for it, but lawyers and accountants scrutinize them for clues as to how the law would be applied.

Note: Previous post on the partial opening of revenue rulings to the public HERE.

Revenue Department Partially Lifts Blanket of Secrecy on Tax Rules

Retreating from a position adopted during former Gov. Phil Bredesen’s administration, the state Department of Revenue has moved to partially raise a veil of secrecy that has covered official interpretations of Tennessee tax law since 2008.
The so-called “letter rulings” are provided on request to taxpayers, typically companies, willing to pay a fee for an answer to questions on the state tax consequences in a given situation.
Apparently, Amazon.com got a secret letter ruling late last year on its desire to be exempt from collecting Tennessee sales taxes. Gov. Bill Haslam has said there are “ongoing negotiations” with Amazon that could lead to another, clarifying letter ruling.
The policy change will not directly impact the Amazon situation, but it will mean the partial opening of a door completely closed three years ago.
As of Wednesday, the Department of Revenue has issued 40 “letter rulings” this year and has decided that redacted versions of 17 will be made public and posted on the department’s website, according to Deputy Commissioner Glen Page.
Another 15 of this year’s rulings remain “under review,” he said, and eight will be kept secret, typically because of concerns that the taxpayer could be identified because of specific information in the ruling, even if the name is deleted.
As for the rulings issued under Bredesen, the department has selected five rulings deemed of enough interest to make public but will “not to go back and re-hash” the rest, Page said, unless a particular reason becomes apparent.
State Comptroller Justin Wilson had clashed with the Bredesen policy of non-disclosure, saying the officials would not even provide information that he felt need by auditors and others in his office.
“They were very difficult about disclosing information to me,” said Wilson, who praised the recent policy change, though saying he would prefer going even further in making documents public.

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