Tag Archives: taxes

Haslam board shifts costs from gas stations to taxpayers

Under Gov. Bill Haslam’s aministration, the Underground Storage Tank and Solid Waste Disposal Control Board has been shifting the financial burden of cleaning up toxic spills at gas stations and truck stops from business owners to taxpayers, http://www.tennessean.com/story/news/environment/2016/08/20/haslam-environmental-changes-shift-cleanup-costs-taxpayers/88906192/.

The 14-member board, 12 of whom are appointed by the governor, sets rules for the $50 million environmental fund overseen by the Tennessee Department of Environment and Conservation, or TDEC. The fund has been paying to clean up spills since 1990. It is financed by a combination of a gas tax paid by consumers at the pump and an annual fee paid by owners of petroleum tanks.

Since the board has been reconfigured, members representing consumers have been eliminated.

The board, which retained its four petroleum industry members, has voted in favor of a resolution to increase the state dollars available to private companies for environmental spills caused by failures or accidents from $1 million to $2 million. That became law in 2015.

This year, a new law gives the board the power to give all gas stations and truck stops a big break — suspending their annual fees to the cleanup fund entirely. Some board members have signaled their support for eliminating those fees this year — despite hearing from the man in charge of the state’s underground storage tank program that a “historically high burden of this funding has shifted onto the public.”

Suspending the industry’s financial contributions would leave taxpayers, who haven’t gotten the same breaks as gas stations and truck stops, bearing full financial responsibility for toxic spills.

Tennessee drivers continue to shoulder most of the cost of petroleum spills at Pilot Flying J, Chevron, Exxon and other companies, large and small, through a one-fourth of a cent per gallon gas tax that added up to about $18 million last year. Companies contribute about $2 million in fees each year.

The fund has paid out millions to private petroleum companies since it began operating in 1990, including $10 million to Pilot Flying J, the Haslam family truck stop chain worth an estimated $33 billion. The governor continues to hold an undisclosed financial stake in the company.

A spokeswoman for Haslam noted that the governor took steps to consult with counsel before restructuring the board to ensure there was no conflict of interest. The new structure was proposed by TDEC, said Jennifer Donnals, the spokeswoman.

Even before the reconstitution of the board, members who had been appointed before Haslam took office voted to cut industry fees, Donnals noted.

Haslam ‘not holding my breath’ on sales tax action

Gov. Bill Haslam says he’s backing a state Department of Revenue rule to requiring out-of-state retailers to collect Tennessee sales taxes because he has little confidence Congress will act, reports the Times-Free Press.

“They [Congress] keep saying that they’re going to take it up, but I am not holding my breath they’ll take it up any time soon,” Haslam said in an interview Friday.

“For me, it’s just this: The economy is shifting so much that way [to the internet],” Haslam said. “It’s literally not a fair playing field for our in-state retailers. And those are folks who are not only having to collect the tax, but they’re paying property tax. They’re sponsoring the local Little League team, and these are folks who are contributing in a full way to our economy.”

He said the present situation gives internet retailers up to a 9.75 percent advantage over their brick-and-mortar competitors in Tennessee, which must collect the state’s 7 percent sales tax and local government taxes of up to 2.75 percent.

“It’s not fair to say, well, we’re going to let your competitors not collect that tax we make you collect,” Haslam added.

Haslam’s Revenue Department recently held a rule-making hearing on the proposal. It would require internet, catalog and other out-of-state companies with no physical presence in Tennessee but with annual in-state sales of at least $500,000 to collect state and local sales taxes starting in 2017.

TN fiscal year revenue $925M over estimates

News release from Department of Finance and Administration
NASHVILLE, Tenn. – Total Tennessee tax revenues for July were slightly more than the budgeted expectation. Finance and Administration Commissioner Larry Martin reported today that July, which ended the accrual fiscal year, recorded a net positive growth of 0.74%, compared to July of 2015. Overall, July revenues were $1.0 billion, which is $13.8 million more than the state budgeted.

“July revenue results were somewhat mixed,” Martin said. “With sales taxes, we had stronger than anticipated growth but corporate and business taxes experienced negative growth. Also, all other taxes, taken as a group, were marginally below July 2015.

“Despite the mixed results in July, the year-to-date growth rate for all taxes ended the year well above last year’s revenue performance. It is important to note that despite the underperformance with corporate business taxes in July, year to date these taxes have a strong positive growth.” Continue reading →

On proposed TN tax collection by out-of-state retailers

A proposed Tennessee Revenue Department rule that would require out-of-state retailers to begin collecting Tennessee sales taxes on items sold here is pitting state-based retailers who use the internet, catalogs and cable to sell across the country against traditional brick-and-mortar stores that don’t.

Further from the Times-Free Press:

At a departmental hearing on the proposed rule Monday, opponents testified against the plan to require remote sellers with no physical presence in Tennessee to begin collecting sales taxes from in-state buyers in 2017.

States like Tennessee require in-state retailers to collect state and local sales taxes. But two U.S. Supreme Court decisions, the second one rendered back in 1992 before the explosion of the internet and internet commerce, bar states from requiring sellers with no physical presence in their state to collect sales taxes.

While representatives for traditional brick-and-mortars didn’t testify, they filed letters in support of the proposed rule, which would require out-of-state vendors who sell to Tennesseans to charge state and local sales taxes that can hit 9.75 percent.

Opponents’ chief concern is that other states may retaliate.

“While the rule appears to be targeted only at out-of-state sellers, it could actually cause a boomerang effect that would bring real and serious harm to retailers and businesses right here in Tennessee,” said a group of five businessmen and businesswomen in a letter to the Department of Revenue.

They warned the Haslam administration’s proposed regulation “would encourage other states to impose similar obligations on Tennessee businesses that sell to customers in other states — a situation that could lead to a chaotic patchwork of tax regulations and laws that reach beyond state borders and into Tennessee.”

Gas tax talk in Sen. Tracy’s GOP primary

Steve Lane believes the gas tax will emerge as a key election issue as he challenges state Sen. Jim Tracy in the August Republican primary for Senate District 14, according to the Daily News Journal.

“I oppose any gas tax increase,” said Lane of Murfreesboro, a candidate running in the Aug. 4 Republican primary against Tracy of Shelbyville and fellow challenger Matt Randolph of Ardmore.

The winner of the Republican primary, which starts with early voting Friday, will face Democratic candidate Gayle Jordan of Murfreesboro in the Nov. 8 election.

Randolph declined to comment for this story because he said he needed to research the gas tax issue.

A gas tax hike won’t affect the affluent who can afford new cars that are more fuel-efficient at the same level an increase will for a guy driving an old pickup truck, Lane said.

“Sen. Tracy supports it,” said Lane, who owns and operates a home construction business. “I think that’s one of the starkest differences. The people who can least afford it, the working class and the working poor, will have to shoulder the burden of the gas tax increase.”

Tracy, however, has said he wants more information about road needs and ways to pay for them before taking any positions on new gas taxes.

“I’m opposed to any kind of increase where we are today,” said Tracy, the Senate Transportation Committee chairman. “I signed a pledge last year that I was against the gasoline tax increase.”

…”I passed a bill that requires that all the money coming from the gasoline and diesel goes right into the transportation fund,” Tracy said. “It cannot be used in the general fund. It makes it against the law to do that.”

…But Lane worries that a TDOT study will lead to a recommended gas tax hike.

“I can’t remember seeing an elected official who is a true champion of the common man,” Lane said. “I’m a blue-collar guy. … My grandfather was a truck driver, and my dad was a truck driver. So opposing a gas tax increase is actually a fight for the working class.”
—
Note: A campaign finance snapshot in the District 14 GOP primary:

Tracy raised $88,450 in the last quarter, spent $38,315 and had $221,635 cash on hand July 1. Lane and Randolph both reported they had not raised or spent any money.

June state revenue $112.8M above budget prediction

News release from Department of Finance and Administration
NASHVILLE, Tenn. – Newest figures show that total tax revenues in the month of June were more than budgeted expectations. Finance and Administration Commissioner Larry Martin reported today that June ended with a net positive growth of 6.16% compared to taxes in the same month last year. Overall June revenues were $1.3 billion, which is $112.8 million more than the state budgeted.

“June sales tax revenues recorded much slower growth than previous months, which was not expected,” Martin said. “However, June brought us stronger than anticipated collections from corporate business taxes and well above budgeted expectations for all other tax sources combined.”

On an accrual basis, June is the eleventh month in the 2015-2016 fiscal year.

General fund revenues exceeded the budgeted estimate in the amount of $105.3 million. The four other funds that share in state tax revenues were also in excess of budgeted expectations by $7.5 million.

Sales tax revenues were $1.2 million more than the estimate for June. The June growth rate was 1.28%. For eleven months revenues are over budget by $346.2 million. The year-to-date growth rate for eleven months was 7.18%. Continue reading →

Haslam moves to require online retailers collect TN sales tax

Gov. Bill Haslam wants Tennessee to join a growing group of states seeking to force either Congress or the U.S. Supreme Court to revisit rulings preventing collection of sales taxes from out-of-state online retailers. reports the Times-Free Press.

State Department of Revenue officials will hold a rulemaking hearing in August on a proposed rule that administration officials hope will tear down that barrier and let the tax dollars roll in.

The rule would require out-of-state online companies with more than $500,000 a year in Tennessee sales to collect and remit sales taxes to the state starting July 1, 2017.

Adopting the rule is a multistep process. If adopted, it’s virtually certain to be challenged in court. And that’s the primary objective of the strategy being pushed by states like Alabama, South Dakota and now Tennessee.

At least a dozen states are pushing a patchwork of laws or rules they hope will pressure Congress to act or, more likely, force the issue back before the Supreme Court.

“The governor has been out front on this issue and trying to get something through Congress,” Haslam press secretary Jennifer Donnals told the Times Free Press in an email.

If Tennessee is successful, Donnals added, “we would also look at reductions on the sales tax on food to be as cost neutral as possible.”

…Tennessee revenue officials estimate a loss of $300 million to $450 million in sales tax collections annually. The National Conference of State Legislatures estimates states collectively lost out on $23.3 billion in 2012.

“Tennessee is a sales tax-driven state, and we have to be fair to our local businesses,” state Revenue Commissioner Richard Roberts said by email.

Roberts called the status quo “fundamentally unfair” to local retailers. “Just this past year more Americans shopped online over the Thanksgiving-Black Friday weekend than went to stores,” he said.

Nashville, Chattanooga companies lead in TN corporate welfare

Companies bases in Nashville and Chattanooga are leading beneficiaries of “taxpayer handouts to big businesses in Tennessee,” according to Beacon Center of Tennessee statewide listing of incentives and tax breaks.

The new Beacon website, Endcorporatehandouts.com, “is the start of a large public awareness effort on corporate favoritism the Beacon Center will run over the next couple of years,” says a news release.

Further: “The website features an interactive map that tracks which businesses received handouts from the state and local governments. Nashville, Chattanooga, Clarksville, Memphis, and Charleston round out the top five areas for private businesses receiving taxpayer money. The site also features a brand new video on corporate favoritism and a ticker with the Tennessee businesses that have received the most taxpayer money over the past decade.

“…”This is a really exciting start in our effort to educate the public on the unfair and unethical practice of giving the tax dollars of hard-working Tennesseans to multi-million dollar corporations. Ending corporate handouts is an issue that those on both sides of the aisle can come together to support. This isn’t an issue of right and left, it’s an issue of right and wrong.”

The site says $3 billion in “corporate welfare” has been provided to 470 companies since 2005, about 3 percent of the state’s 170,000 companies.

The Commercial Appeal has story on the report. An excerpt: Continue reading →

Haslam: Legislators ready to cut spending to cover lost Hall tax revenue

In a Knoxville appearance Tuesday, Gov. Bill Haslam said legislative leaders have assured him they will be ready to cut state spending to make up for loss of revenue from the Hall tax on investment income, reports Richard Locker.

“I told the Legislature my concern was they were promising to cut taxes without promising to make commensurate expense cuts, and if the economy slowed down and revenues didn’t continue where they are, then that would be a problem. Their leadership assured me that if that time came, they would make the appropriate adjustments,” Haslam said in a brief question-and-answer session with reporters after a speech to the Knoxville Rotary Club.

The governor also said the reduction and ultimate loss of Hall tax revenue by cities and counties who share in its proceeds didn’t weigh heavily into the decision to approve the bill.
Since the Hall income tax on certain dividend and interest income was enacted in 1929, its proceeds have been divided between the state and local governments, with 5/8ths flowing to the state’s general fund and 3/8ths to the city or county where the taxpayer resides.

That formula favors the most populous cities and counties and its most affluent suburbs where more people who own stocks and bonds live.

…Haslam said that from the state’s perspective, the Hall tax was never really fair because some communities were better able to rely on it than others. “Some local communities just happen to do really well because they have a lot of people who paid it, whereas a similar community wasn’t getting anything.”

Memphis refunds $2.38M in ‘jock tax’ collections

As the clock runs out this week on Tennessee’s infamous “jock tax,” the city of Memphis is about to turn over $2.38 million to more than 900 professional basketball players as part of a 2015 settlement, according to the Commercial Appeal.

The city will return its portion of the money — a third of the $7.27 million it’s collected since Tennessee’s professional privilege tax was approved in 2009 — within the next three or four weeks, said Brian Collins, the city’s chief financial officer.

“(The money) was reserved a long time ago, and it won’t have an impact on the city’s budget this year or any year,” Collins said. The city set the funds aside in fiscal year 2015.

The flat tax of $2,500 per game up to $7,500 for NBA and NHL players was widely criticized for eating up most — and in some cases all — of the income lower-paid athletes received from basketball games in Memphis and hockey games in Nashville.

Gary Kohlman, general counsel for the National Basketball Players Association (NBPA), which sued the state over the tax, said “dozens” of players earning the legal minimum paid more in the tax than they earned from the games.

“That was not an isolated event,” he said.

A spokesman for the National Hockey League Players’ Association (NHLPA), which also sued the state, said its players lost money playing against the Nashville Predators too.

Kohlman said some NBA players were also charged the tax just because they were on the team’s roster — even if they didn’t play.

The Tennessee General Assembly voted in 2014 to repeal the tax, effective immediately for hockey players and June 1, 2016, for basketball players.