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2019 Legislative Summaries

Collection of Online Sales Tax

Public Chapter 429 authorizes the Department of Revenue to begin enforcing Sales and Use Tax Rule 129(2) to collect sales tax from out-of-state dealers with no physical presence in Tennessee who make sales of $500,000 or greater within the last 12 months to Tennessee customers.

Effective Date: July 1, 2019

Alcoholic Beverage Manufacturer Privilege Tax

Public Chapter 301 repeals the alcoholic beverage manufacturer privilege tax previously paid to the Department of Revenue. 

Effective Date: May 8, 2019

Disaster Response Activity Exemption

Public Chapter 378 exempts out-of-state businesses, which do not otherwise have nexus in Tennessee, or employees who are responding to state-declared disasters, from franchise and excise tax, as well as business tax for the income and receipts generated from business conducted in the state in response to a disaster. 

Effective Date: May 10, 2019

Repatriated Earnings and Global Intangible Low-Taxed Income

Public Chapter 306 excludes, for excise tax purposes, repatriated earnings and global intangible low-taxed income (GILTI) when computing net earnings or net losses. The legislation requires that 5% of repatriated earnings and GILTI that are included in federal taxable income will be added back when computing net earnings for excise tax purposes.

Effective Date: May 8, 2019; applies to all tax periods beginning on or after January 1, 2018

 

Disaster Response Activity Exemption

Public Chapter 378 exempts out-of-state businesses, who do not otherwise have nexus in Tennessee, or employees who are responding to state-declared disasters from franchise and excise tax, as well as business tax for the income and receipts generated from business conducted in the state in response to a disaster.

Effective Date: May 10, 2019

 

Housing Development Agencies Exemption

Public Chapter 401 expands the existing franchise and excise tax credit for housing development agencies by defining the eligible activities to include the construction of an office or other facility where low-income housing related educational opportunities will be provided.

Effective Date: May 10, 2019

 

Job Tax Credit Job Creation Requirements

Public Chapter 451 eliminates some rarely used discretionary provisions in the job tax credit and headquarters credit statutes related to reduced job creation requirements.

Effective Date: July 1, 2019; applies to tax years beginning on or after January 1, 2019

 

Tax Credit for Qualified Broadband Internet Access Equipment

Public Chapter 501 deletes the franchise and excise tax credit available to broadband service providers for qualified broadband internet access equipment in Tier 3 and Tier 4 counties.

Effective date: July 1, 2019

Recordation Tax Exemption for Certain Trusts

Public Chapter 197 creates an exemption from recordation tax on transfers of property where the transfer deed is executed by a trustee of a testamentary trust or revocable living trust to a beneficiary of the trust. 

Effective Date: April 25, 2019

 

Interactive Sports Wagering Tax

Public Chapter 507 authorizes mobile/interactive sports wagering statewide and imposes a 20 percent tax on the gross income of a licensed gaming operator, to be paid monthly to the lottery corporation. 

Effective Date: July 1, 2019

Professional Privilege Tax 

Public Chapter 478 eliminates the professional privilege tax for tax years beginning June 1, 2020 for all but the following professions: attorney, physician (MD or DO), lobbyist, agent (securities), broker-dealer, and investment adviser. 

Effective Date: May 24, 2019; applies to tax years beginning June 1, 2020

Collection of Online Sales Tax

Public Chapter 429 authorizes the Department of Revenue to begin enforcing Sales and Use Tax Rule 129(2) to collect sales tax from out-of-state dealers with no physical presence in Tennessee who make sales of $500,000 or greater to Tennessee customers.

Effective Date: July 1, 2019

 

Delays effective date of certain streamlined sales tax provisions

Public Chapter 157 delays the effective date of certain streamlined sales tax provisions until July 1, 2021.

Effective Date: April 12, 2019

 

Local Sales Tax Reporting by Out-of-State Dealers

Public Chapter 491 provides that out-of-state dealers who collect and remit Tennessee sales and use tax must report their sales based on the shipped to or delivered to address of the customer. Out-of-state dealers will no longer be able to use the uniform local rate option of 2.25%. Instead, out-of-state dealers must apply the specific local sales tax rate in effect for the city or county jurisdiction into which the sale was shipped or delivered.

Effective: October 1, 2019

 

Physical Fitness Facilities Exemption

Public Chapter 159 exempts from amusement tax dues, fees, or other charges paid to any person principally engaged in offering services or facilities for the development or preservation of physical fitness through exercise or other active physical fitness conditioning.

This exemption will apply to services and facilities such as gyms, fitness centers, fitness studios, high intensity interval training, cross training, ballet barre, Pilates, yoga, spin classes, aerobics classes, and other substantially similar services and facilities that principally provide for exercise or other active physical fitness conditioning.

Effective Date: July 1, 2019

 

Car Wash Exemption

Public Chapter 162 exempts from state and local sales tax any services rendered by a car wash facility, coin-operated or otherwise, where the customer remains in custody of the vehicle and the preponderance of the vehicle’s wash is completed by the customer or automated equipment.

Effective Date: April 18, 2019

 

Agricultural Trailer Exemption

Public Chapter 178 extends the existing sales tax exemption for trailers used to transport livestock to include trailers used to transport farm products, nursery stock, or equipment, supplies or products used in agriculture, or for other agricultural purposes relating to the operation and maintenance of a farm.

Effective Date: July 1, 2019

 

Retail Accountability Program Extension

Public Chapter 179 extends the retail accountability program reporting requirements for wholesalers of food, candy, and nonalcoholic beverages until July 1, 2022.

Effective Date: April 23, 2019

 

Montgomery County Event Center Allocation

Public Chapter 382 creates a special allocation of state sales tax to reimburse a public entity for the construction of a new event center to be used, in part, by a state university in Montgomery County.  A portion of the sales tax revenue generated in the event center and ancillary facilities will be allocated to the public entity for a period not to exceed 30 years to be used to retire the debt of the construction.

Effective May 10, 2019

 

Border Region Retail Tourism Development District Property Exchange

Public Chapter 390 allows a municipality with a border region retail tourism development district to remove property from the district and replace it with adjacent property with an equal or lesser amount of acreage until June 30, 2019.

Effective Date: May 10, 2019

 

Fundraising By Library Support Organizations

Public Chapter 392 increases, from $100,000 to $300,000, the maximum amount of annual sales that charitable entities, whose primary purpose is fundraising to support a public library system, may make to be excluded from the definition of “business” for sales tax purposes.

Effective Date: May 10, 2019

 

Nonprofit Property Owners Association Exemption

Public Chapter 400 creates a sales and use tax exemption for the sale of public safety and public works-related goods to certain large nonprofit property owners associations.

Effective Date: July 1, 2019

 

Agricultural Water Exemption

Public Chapter 427 creates a sales and use tax exemption for water furnished by a utility district and used exclusively in a farming operation.

Effective Date: July 1, 2019

 

Major League Soccer Franchise Allocation

Public Chapter 440 expands the special sales and use tax allocation for sports authorities to apply to major league soccer franchises.

Effective Date: May 22, 2019

 

Periodical Exemption

Public Chapter 473 expands the sales tax exemption currently available to periodicals printed entirely on newsprint or bond paper and regularly distributed at least twice monthly, to apply to periodicals which are distributed at least monthly.

Effective Date: July 1, 2019

 

Dumpster Exemption

Public Chapter 483 exempts from sales and use tax the leasing of dumpsters or other containers for waste or debris removal for a fixed or indeterminate period of time, including the delivery and pickup, so long as the dumpster provider is exclusively responsible for the delivery and pickup of the dumpster.

Effective Date: July 1, 2019

 

Regional Retail Tourism Development District Act

Public Chapter 498 authorizes the creation of a Regional Retail Tourism Development District in Washington County by a municipality.  The local government may receive sales tax revenues in the amount of the incremental increase in state sales tax resulting from the Development District, if the Commissioner of Revenue and the Commissioner of Economic and Community Development determine that such allocation is in the best interest of the state.

Effective date: July 1, 2019

 

Fiber Optic Cable Exemption

Public Chapter 501 provides that the definition of “tangible personal property” for sales and use tax purposes does not include fiber-optic cable after it has become attached to a utility pole, building, or other structure or installed underground.

Effective date: July 1, 2019

 

Warehouse and Distribution Center Building Materials Exemption

Public Chapter 503 creates a sales and use tax exemption on qualified building materials used in the construction, expansion, or renovation of one or more qualified, new, or expanded warehouse or distribution facilities, if the taxpayer or a lessor, or both, make a capital investment of at least $1 billion in the construction or renovation of such facilities and related facilities at the same location within the qualified investment period. Taxpayers seeking this exemption must apply to the Department of Revenue by October 1, 2019 describing the investment to be made.

Effective Date: May 24, 2019

 

Border Region Retail Tourism Development District Act Modifications

Public Chapter 511 expands the costs that can be reimbursed to include the cost of developing portions of a development district that do not on their own meet the visitor and revenue thresholds, as well as those projects that will be developed at a later time. The legislation deletes the act’s original “best interest of the state” approval language and instead requires approval to be based on whether the development is reasonably anticipated to meet the visitor and revenue thresholds.

The legislation also clarifies that a deviation from a district’s master plan after it has been certified will not cause the district to lose its certification or any otherwise reimbursable cost, so long as the revised plan is expected to meet the required visitor and revenue thresholds. Additionally, the legislation gives municipalities discretion to send the Department of Revenue the annual summary of project costs and gives project developers the right to appeal the department’s determination that a cost is not a qualifying cost.

Effective Date: June 3, 2019; applies retroactively to districts certified prior to June 3, 2019

New AMVETS Specialty License Plate

Public Chapter 64 creates a new AMVETS specialty license plate.

Effective Date: July 1, 2019

 

Motor Carrier Registration

Public Chapter 70 authorizes the Department of Revenue to suspend, revoke, or refuse to issue a registration, permit, plate, or certificate of certain motor carriers that have been prohibited from operating by the Federal Motor Carrier Safety Administration.

Effective Date: July 1, 2019

 

New Bosnia Veteran Plate Design

Public Chapter 75 creates a new license plate design for the Bosnia Veteran plate.

Effective Date: March 28, 2019

 

Historic Military Vehicle License Plate Requirements

Public Chapter 103 exempts historic military vehicles that are at least 25 years old from the requirement to display a license plate on the exterior of the vehicle. Instead, the owner or operator shall maintain the vehicle’s registration plate in the vehicle and produce the plate for inspection upon the request of any law enforcement officer.

Effective Date: July 1, 2019

 

Dynamic Accessibility Act

Public Chapter 112 requires the use of a new symbol of access for disabled drivers and disabled passengers for use on vehicle registrations, placards, decals, and license plates beginning July 1, 2020.

Effective Date: April 9, 2019

 

Class I Off-Highway Vehicle Definition

Public Chapter 155 redefines Class I off-highway vehicles to include vehicles capable of holding no more than four passengers.

Effective Date: April 18, 2019

 

New Silver Star Plate Design

Public Chapter 171 creates a new license plate design for the Silver Star plate.

Effective Date: April 18, 2019

 

Garage Keeper Reporting Requirement

Public Chapter 209 eliminates the requirement for owners of garages, trailer parks, or any type of storage or parking lots to file a report with the department when a vehicle has been stored or left unclaimed for more than 30 days.

Effective Date: April 25, 2019

 

Vehicle Recall Notification Coordination

Public Chapter 227 authorizes the Commissioner of Revenue to coordinate with vehicle equipment manufacturers that have issued a major recall and have requested assistance with contacting registrants who may be affected by the recall.

Effective Date: April 30, 2019

 

New License Plates

Public Chapter 253 designates various new specialty license plates including:

  • Friends of Shelby Park and Bottoms
  • Greene County School System
  • Knights of Columbus
  • Jackson State University
  • Tennessee Voices for Victims
  • Women Veterans of Color
  • Germantown Charity Horse Show
  • Whitehaven High School
  • Tennis Memphis
  • Service Dogs
  • University of Tennessee Health Science Center
  • Juvenile Diabetes Research Foundation
  • Lineman Power Tennessee
  • Order of the Eastern Star
  • Fighting for At-Risk Youth
  • Blood Donor
  • Center for Living and Learning

This public chapter designates new military plates including:

  • Somalia Veteran and Somalia Era Veteran
  • Korean Defense Service Medal
  • Operation Inherent Resolve Veteran and Operation Inherent Resolve Era Veteran

This public chapter also designates new cultural plates including:

  • Antique Auto, for unrestricted use on antique vehicles.
  • Legion of Merit

In addition, this public chapter extends until July 1, 2020, the timeframe for meeting the issuance requirement of 1,000 plates for the following license plates:

  • Niswonger Children’s Hospital
  • Martin Luther King, Jr.

Effective Date: July 1, 2019

 

Personalization of Military and Memorial Plates

Public Chapter 461 authorizes the personalization of all military and memorial plates within the confines of the existing plate design.

Effective Date: July 1, 2019

 

County Clerk Lien Notation

Public Chapter 462 requires county clerks, rather than the Department of Revenue, to perform notation of liens and extensions of mortgages on certificates of title.

Effective Date: July 1, 2019