2008 Legislative Summaries
Captive Real Estate Investment Trusts: Definition
Public Chapter 1106, Section 35, defines the new term "captive real estate investment trust" or "captive REIT" to mean "an entity with an election in effect under Section 856(c)(1) of the Internal Revenue Code in which the taxpayer, directly or indirectly, has at least ninety percent (90%) ownership interest by value determined in accordance with generally accepted accounting principles and whose shares are not traded on a national stock exchange."
Effective date: Applies to all tax periods on or after July 1, 2008.
Captive Real Estate Investment Trusts: Net Earnings
Public Chapter 1106, Section 36, requires financial institutions to disclose dividends received from captive REITs. Failure to make such disclosures will result in a disallowance of the deduction for dividends received by financial institutions that own 80 percent or more of the outstanding capital stock of a captive REIT. Failure to disclose will also result in a 50 percent penalty on the amount of any underpayment arising from the adjustment to the financial institution's net earnings.
Effective date: Applies to all tax periods ending on or after July 1, 2008.
Sales by Affiliates
Public Chapter 1106, Section 37, levies the excise tax on any gain from the sale of an asset by an entity not otherwise subject to the excise tax if the asset was owned during the twelve-month period immediately prior to the sale by an affiliate that was subject to the excise tax at the time of ownership but ceased to exist before the sale occurred.
Effective date: Applies to all transactions occurring on or after July 1, 2008.
Exemption for Entities Engaged in the Asset-Backed Securitization of Debt Obligations
Public Chapter 1106, Section 37, levies the excise tax on any gain from the sale of an asset by an entity not otherwise subject to the excise tax if the asset was owned during the twelve-month period immediately prior to the sale by an affiliate that was subject to the excise tax at the time of ownership but ceased to exist before the sale occurred.
Effective date: June 5, 2008.
Diversified Investing Funds Exemption
Public Chapter 1106, Section 41, clarifies the scope of the exemption for diversified investing funds. A fund will not qualify for the exemption if its capital is derived primarily from entities or individuals who are affiliated with the fund. This public chapter provides that the term "affiliated" includes individuals who have more than fifty percent ownership in the fund, including indirect ownership through a family member (ancestors; spouses or former spouses; lineal descendents of the individual, spouse, former spouse, or parents; spouses or former spouses of lineal descendents; estates or trusts of deceased individuals who, while living, were any of the above).
Effective date: Applies to any tax period beginning on or after January 1, 2009.
Job Tax Credit: Sunset
Public Chapter 1106, Section 42, moves the job tax credit sunset date from January 1, 2011 to January 1, 2016.
Effective date: Effective date: June 5, 2008.
Net Operating Loss Carryforward
Public Chapter 1106, Section 43, authorizes the Commissioner of Revenue and the Commissioner of Economic and Community Development to allow a taxpayer that qualifies for the job tax credit under Section 67-4-2109(c)(2)(I)(i), (ii), or (iii), to carry net operating losses forward beyond the initial 15-year authorized period, provided that such an extension is determined to be in the best interests of the state.
Effective date: Effective date: June 5, 2008.
Job Tax Credit: Extension of Investment Period
Public Chapter 1106, Section 44, authorizes the Commissioner of Economic and Community Development to extend, by up to four years, the period during which a qualified business enterprise must make the required capital investment in excess of one billion dollars in order to qualify for the job tax "super credit."
Effective date: Effective date: June 5, 2008.
Job Tax Credit: Integrated Suppliers
Public Chapter 1106, Sections 45 and 46, allows enhanced job tax credit in Section 67-4-2109(c)(2)(I)(ii) to an integrated supplier, which is any on-site company engaged solely in providing goods and services to a manufacturer that has qualified for the job tax credit in connection with a required capital investment in excess of $1 billion dollars.
Effective date: Effective date: June 5, 2008.
Job Tax Credit: Economically Distressed Counties
Public Chapter 1106, Section 47, allows qualified business enterprises located in tier two or tier three economically distressed counties additional time (three and five years respectively) to create the minimum number of jobs necessary to receive the job tax credit.
Effective date: Effective date: June 5, 2008.
Job Tax Credit: Newly Created Positions
Public Chapter 1106, Section 48, authorizes the Commissioner of Revenue, with the approval of the Commissioner of Economic and Community Development, to approve a job tax credit where the newly created position existed in Tennessee less than ninety days prior to being filled by the taxpayer, provided that the allowance of the credit is determined to be in the best interests of the state.
Effective date: Effective date: June 5, 2008.
Job Tax Credit: Computation by General Partnership
Public Chapter 1106, Section 49, allows the job tax credit to be computed by a general partnership that establishes a qualified headquarters facility in Tennessee as defined under Section 67-6-224. A partner that is subject to Tennessee franchise and excise tax and directly holds a first tier ownership interest in the general partnership is permitted to utilize a percentage of the credit equal to the percentage of its ownership interest.
Effective date: Effective date: Applies to any business plan filed with the Department of Revenue on or after January 1, 2008.
Qualified Headquarters Relocation Credit: Computation by General Partnership
Public Chapter 1106, Section 50, allows the qualified headquarters relocation expense credit to be computed by a general partnership that establishes a qualified headquarters facility in Tennessee as defined under Section 67-6-224 and that qualifies for the job tax credit. A partner that is subject to Tennessee franchise and excise tax and directly holds a first tier ownership interest in the general partnership is permitted to utilize a percentage of the credit equal to the percentage of its ownership interest.
Effective date: Effective date: Applies to any business plan filed with the Department of Revenue on or after January 1, 2008.
Green Energy and Carbon Charge Tax Credit
Public Chapter 1106, Section 52, creates two tax credits for manufacturers that make a capital investment of over $250 million in constructing, expanding, or remodeling a facility that is engaged in manufacturing a product that is necessary for the production of green energy. Both credits are refundable to the extent that the credit amount exceeds the taxpayer's remaining liability. However, any refund of the green energy credit shall not exceed, for any one tax year, $1.5 million for each $250 million in cumulative capital investments made, and any remaining credit may be carried forward in perpetuity until it is claimed as a refund or used as a credit. The green energy credit will cease to be effective January 1, 2029. The Commissioner of Economic and Community Development is authorized to extend the period for making the required capital investment for up to two years.
Effective date: June 5, 2008.
Phase-Out of Deduction for Financial Institution Affiliated Groups
Public Chapter 1106, Section 53, eliminates, over a period of four years, the 25% deduction that has been allowed in computing net worth for financial institution affiliated groups that elect to compute their net worth on a consolidated basis. For tax years beginning on or after January 1, 2008, the financial institution affiliated group may deduct 20% of its securities classified as held to maturity or available for sale. For tax years beginning on or after January 1, 2009, the deduction is changed to 12.5%; for tax years beginning on or after January 1, 2010, the deduction is changed to 5%; for tax years beginning on or after January 1, 2011, the deduction is eliminated entirely.
Effective date: June 5, 2008.
Gross Premiums Tax Credit
Public Chapter 1106, Sections 54 and 56, deletes obsolete language regarding the gross premiums tax credit and insurance companies.
Effective date: June 5, 2008.
Insurance Companies Exemption
Public Chapter 1106, Section 55, codifies in the franchise and excise tax statutes an existing franchise and excise tax exemption for insurance companies that was enacted under the insurance laws in 2002.
Effective date: June 5, 2008.
Low Income House Tax Credits
Public Chapter 1106, Sections 57 and 58, deletes obsolete language regarding low-income housing tax credits.
Effective date: June 5, 2008.
Family-Owned Non-corporate Entity Exemption
Public Chapter 1106, Section 68, requires every exempt family-owned non-corporate entity (FONCE) to periodically file forms reporting such information as the Commissioner of Revenue shall reasonably prescribe regarding the family-owned non-corporate entity and the family members participating therein. No later than January 20, 2009, the Commissioner must submit to the General Assembly a summary report of the compiled information. The report must include an analysis of the utilization, costs, and benefits of the exemption as well as findings and recommendations pertaining to continuation of the exemption.
Effective date: June 5, 2008.
Grace Period for Filing of Tax Documents
Public Chapter 1106, Section 1, makes the twenty-four (24) hour grace period for filing tax documents applicable to documents sent via delivery services, in addition to those sent via United States Mail. Prior to this amendment, the twenty-four (24) hour grace period only applied to documents transmitted via United States mail.
Effective date: June 5, 2008, and shall apply to matters under appeal on the effective date.
Attorneys' Fees
Public Chapter 1106, Section 60, provides that any party that is found to have committed fraud or to be the transferee of assets conveyed in violation of the provisions of Title 66, Chapter 3, relating to fraudulent transfers of property, shall not be awarded attorneys' fees or litigation expenses.
Effective date: June 5, 2008.
Tobacco Manufacturers' Escrow Fund Act
Public Chapter 763 provides that the Attorney General's Office may disclose otherwise confidential information when necessary in discharge of the duty to enforce or defend the Tennessee Tobacco Manufacturers' Escrow Fund Act, or in the course of any litigation, arbitration or proceeding, related to that Act or the Tobacco Master Settlement Agreement.
Effective date: April 15, 2008.
Tobacco Licenses
Public Chapter 1090 requires that an application for a tobacco license include the applicant's telephone number as well as the name, address, and telephone number of the resident agent (in addition to information that is already required on the form). The chapter also provides that all licensees must notify the Commissioner of Revenue, in writing, within ten days of any change in the information provided on the application. The chapter also increases the license fee for manufacturing distributors, tobacco manufacturer's warehouses, and wholesale dealers and jobbers from $20 to $200. It increases the license fee for tobacco distributors from $10 to $100 and raises the fee for replacement of a lost or destroyed license from $1 to $25. The chapter further provides that a tobacco license renewal may be denied for failure to pay the tobacco tax or for violation of any other provision of title 67, chapter 4, part 10. Finally, the chapter increases the specific penalty for engaging in business without obtaining or renewing the required license. The penalty is increased from 50% to 100% of the license fee for each month or part of a month during which the activity continues. (The Commissioner of Revenue also has the discretion to impose an additional penalty of up to $250 per day for each day the unauthorized activity continues).
Effective date: July 1, 2008.
Fire Safety Standard and Firefighter Protection Act
Public Chapter 920 enacts the Fire Safety Standard and Firefighter Protection Act. Among other things, the Act bars the sale of cigarettes in this state unless the cigarettes have been tested in accordance with the Act, a written certification has been filed by the manufacturer with the state fire marshal, and the cigarettes have been marked in accordance with the Act. The manufacturer must also pay the state fire marshal a fee of $1,000 for each brand family of cigarettes listed on the certification to support processing, testing, enforcement and oversight activities under the Act. A manufacturer that violates the provisions of the Act is subject to a civil penalty of up to $100,000. A retailer in violation of the Act is subject to a civil penalty of up to $25,000. Persons that make a false certification are subject to a civil penalty of up to $75,000. Any person in violation of any other provision of the Act are subject to a civil penalty $1,000 for a first offense and $5,000 for each subsequent offense. Any cigarettes sold or offered for sale that do not comply with the requirements of the Act are subject to forfeiture and, upon forfeiture, will be destroyed. Whenever any law enforcement officer or authorized representative of the state fire marshal discovers any cigarettes that have not been marked in accordance with the Act, such personnel are authorized and empowered to seize such cigarettes. Such cigarettes shall then be turned over to the Commissioner of Revenue and shall be destroyed. The Commissioner of Revenue, in the regular course of conducting inspections of wholesale and retail dealers, may inspect cigarettes to determine if the cigarettes are properly marked and shall notify the state fire marshal if the cigarettes are not marked as required.
Effective date: July 1, 2008 for purposes of rulemaking and January 1, 2010 for all other purposes.
Regional Jail Authority Act
Public Chapter 1092 enacts the Regional Jail Authority Act. The property and revenues of an authority created pursuant to the Act are exempt from all state, county, and municipal taxation, except inheritance, transfer, and estate taxes. Additionally, bonds issued pursuant to the Act, and the income from the bonds, are exempt from all state, county and municipal taxation, except inheritance, transfer and estate taxes.
Effective date: June 3, 2008 for purposes of rulemaking and October 1, 2008 for all other purposes.
Traumatic Brain Injury Fund - Fines for Drag Racing
Public Chapter 1048 imposes an additional fine of $25.00 on drivers who engage in drag racing, and specifies that revenue collected from such fine is to be paid into the traumatic brain injury fund.
Effective date: July 1, 2008.
TBI Drug Chemistry Unit Drug Testing Fund - Fees for Drug Testing
Public Chapter 1201 imposes a drug testing fee of $100.00 upon conviction for a violation of any part of the Tennessee Drug Control Act and specifies that all revenue collected is to be paid into the TBI Drug Chemistry Unit Drug Testing Fund.
Effective date: June 20, 2008.
Estate or Inheritance Taxes: Assessments
Public Chapter 1106, Section 33, clarifies that the statutory period during which the Department can make an assessment of estate or inheritance tax as a result of a federal estate tax adjustment made by the Internal Revenue Service shall not expire prior to the expiration of two years from the date the Commissioner is notified in writing by the taxpayer of such revisions.
Effective date: June 5, 2008.
Estate and Inheritance Taxes: Refund Claims
Public Chapter 1106, Section 34, clarifies that the Commissioner of Revenue is authorized to refund estate and inheritance tax due a taxpayer because of a decrease in federal estate tax resulting from an examination by the Internal Revenue Service, provided that the claim is filed with the Commissioner within two years from the date of the redetermination of the estate.
Effective date: June 5, 2008.
Hall Income Tax
Public Chapter 1106, Sections 38 and 39, makes consistent the language of the franchise and excise tax exemption and the Hall income tax exemption for certain qualifying entities that are solely engaged in the asset-backed securitization of debt obligations.
Effective date: June 5, 2008.
Gasoline Tax
Public Chapter 1106, Section 40, suspends until July 1, 2009 the required increase in the Tennessee gasoline tax by an amount equal to any decrease in the corresponding federal tax.
Effective date: June 5, 2008.
Recordation Tax
Public Chapter 1106, Sections 64 through 67, allows for the appropriation of certain realty transfer tax revenue to the Wetland Acquisition Fund, the Local Parks Land Acquisition Fund, the State Land Acquisition Fund, and the Agricultural Resources Conservation Fund. If an appropriation is not made, the revenue is credited to the General Fund.
Effective date: June 30, 2008, and shall be repealed on June 30, 2010, at which time the provisions that existed immediately prior to enactment of Public Acts of 2003, Chapter 355, Sections 33 through 36, shall be revived.
Business Tax
Public Chapter 924 raises, from $3.50 to $5.00, the fee due the county clerk for transferring a business license from one location to another.
Effective date: July 1, 2008.
Business Tax
Public Chapter 1100 allows the county clerk or city tax collector to collect delinquent business tax at any time before the Commissioner of Revenue notifies the taxpayer of an audit or takes any other action to collect the tax under the provisions of the Tax Enforcement Procedures Act. The Commissioner cannot begin collection until the tax has been delinquent for more than six months.
Effective date: June 5, 2008.
Litigation Tax
Public Chapter 1074 provides that a petitioner for an order of protection shall not be charged with litigation taxes associated with an order of protection. If the court, after a hearing, issues or extends an order of protection, all litigation taxes shall be assessed against the respondent.
Effective date: May 28, 2008.
Local Severance Tax
Private Chapter 84 provides that, subject to approval by a two-thirds (2/3) vote of the Perry County legislative body, the severance tax on minerals shall increase from five cents per ton to ten cents per ton in Perry County.
Effective date: April 21, 2008.
Membership Dues
Public Chapter 1106, Sections 2 and 3, repeals the sales tax exemption applicable to the first $150 per year of membership dues or fees to a recreation club or community service organization. Pursuant to 2007 Public Chapter 602, Section 152, this exemption was originally repealed effective July 1, 2009. Public Chapter 1106 revises the date of repeal, making it effective July 1, 2008.
Effective date: Applies to dues and fees billed on or after July 1, 2008 for membership periods occurring on or after July 1, 2008.
Computer Software
Public Chapter 1106, Section 4, clarifies language applicable to the leasing of computer software for sales and use tax purposes. Sections 5 and 6 clarify language applicable to the installation and repair of computer software for sales tax purposes.
Effective date: June 5, 2008.
Repair and Maintenance of Medical Equipment
Public Chapter 1106, Section 7, clarifies that the repair of tax-exempt medical equipment is exempt from the sales and use tax. In addition, components or attachments for single-patient use in conjunction with oxygen delivery equipment, kidney dialysis equipment, and enteral feeding systems are exempt.
Effective date: June 5, 2008.
Home Health Care Providers
Public Chapter 1106, Section 8, clarifies language applicable to tangible personal property that is subject to sales and use tax when purchased for use in providing outpatient health care services in the home. Such property subject to tax includes mobility enhancing equipment and durable medical equipment, except that oxygen delivery equipment, kidney dialysis equipment, and enteral feeding systems continue to be fully exempt from tax regardless of the purchaser.
Effective date: June 5, 2008.
Durable Medical Equipment
Public Chapter 1106, Section 9, provides that the term "durable medical equipment" includes repair and replacement parts for the equipment unless the repair or replacement part is a part, component, or attachment that is for single patient use.
Effective date: June 5, 2008.
Documentation Requirements for Purchases by Nonprofit Organizations
Public Chapter 1106, Section 10, clarifies that a nonprofit organization that wishes to make purchases on a tax-exempt basis may provide its vendors with either a copy of an exemption certificate issued by the Commissioner of Revenue or a fully completed Streamlined Sales Tax Certificate of Exemption, which must include the exemption account number included on the certificate issued by the commissioner.
Effective date: June 5, 2008.
Fundraising by Library Support Organizations
Public Chapter 1106, Section 11, amends the exemption for fundraising activities by charitable organizations whose primary purpose is fundraising in support of a city, county, or metropolitan library system. The organization may elect to make sales on a continuous basis rather than being limited to two semiannual temporary sales periods. A continuous sale shall be exempt, provided that sales do not exceed $100,000 per calendar year. The election must remain in effect for at least four years.
Effective date: January 1, 2009.
Kerosene Exemption
Public Chapter 1106, Section 12, provides that kerosene sold at retail through dispensers that prevent delivery directly from the dispenser into a vehicle fuel supply tank (through a "blocked pump") is exempt from the sales and use tax.
Effective date: June 5, 2008.
Hospital Records Exemption
Public Chapter 1106, Section 13, exempts from sales and use tax any copies of hospital records provided to an attorney, agent, or other authorized representative acting in a lawsuit on behalf of a not-for-profit hospital that has received a determination of exemption. The term “hospital records” includes medical histories, records, reports, summaries, diagnoses, prognoses, records of treatment and medication ordered and given, entries, X-rays, radiology interpretations, and other written, electronic, or graphic data prepared, kept, made, or maintained in hospitals that pertain to hospital confinements or hospital services rendered to patients admitted to hospitals or receiving emergency room or outpatient care.
Effective date: June 5, 2008.
Indoor Sports Facility
Public Chapter 1106, Sections 14 and 15, expands the allocation of state and local sales tax used to retire the debts on an indoor sports facility in a county with a metropolitan form of government by allowing for the allocation of sales tax on all events occurring at the sports facility.
Effective date: July 1, 2008.
Baseball and Softball Complex Adjacent to a Minor League Baseball Stadium
Public Chapter 1106, Section 16, expands the allocation of state and local sales tax used to retire the debts on a baseball and softball complex adjacent to a minor league baseball stadium by allowing for the allocation of sales tax on ticket proceeds and souvenirs and allowing such allocation to continue until the debt is retired.
Effective date: July 1, 2008.
Courthouse Square Revitalization Pilot Project
Public Chapter 1106, Section 17, extends the allocation of the sales and use tax pursuant to the Courthouse Square Revitalization Pilot Project Act from June 30, 2015 to June 30, 2023.
Effective date: June 5, 2008.
Specified Digital Products: Definitions
Public Chapter 1106, Section 18, clarifies the application of the sales and use tax to music, books, and video that are downloaded digitally rather than purchased in their traditional form. The clarification is accomplished through the implementation of various definitions relating to digital products in compliance with the Streamlined Sales and Use Tax Agreement.
Effective date: January 1, 2009.
Sales of Specified Digital Products
Public Chapter 1106, Section 19, provides that the retail sale, lease, licensing, or use of specified digital products transferred to or accessed by subscribers or consumers in Tennessee are subject to the sales and use tax. Retail sales, leases, licensing, or use subject to tax includes specified digital products sold both with rights of permanent and less than permanent use, those sold with rights of use conditioned on continued payment by the subscriber or purchaser, and subscriptions to, access to, or the purchase of a digital code for receiving or accessing specified digital products. However, "digital code" does not include gift certificates or gift cards that represent a monetary value that is redeemable for specified digital goods. In addition, subscriptions to satellite radio services are excluded from "specified digital products" subject to tax. Subscriptions to data processing and information services that allow data to be generated, acquired, stored, processed, or retrieved and delivered by electronic transmission to a purchaser are also excluded from taxable "specified digital products" when the purchaser's primary purpose for the transaction is the processed data or information.
Effective date: January 1, 2009.
Specified Digital Products: Exemptions
Public Chapter 1106, Section 20, provides that the tax on retail sales of digital products does not apply when the equivalent product in tangible form is exempt from sales and use tax. Digital music, digital books, and digital videos provided to the customer without charge on a trial basis are also exempt from tax.
Effective date: January 1, 2009.
Specified Digital Products: Standard Local Rate
Public Chapter 1106, Section 21, implements a standard local tax rate of 2.5 percent with respect to sales of specified digital products.
Effective date: January 1, 2009.
Specified Digital Products: Industrial Machinery Exemption
Public Chapter 1106, Section 22, provides an exemption for machinery and equipment necessary to convert tangible personal property into taxable specified digital products for resale and consumption off the premises.
Effective date: January 1, 2009.
Farming Exemption
Public Chapter 1106, Section 23, clarifies that persons in the business of producing and selling agricultural products qualify for the exemptions afforded to a "qualified farmer or nurseryman."
Effective date: June 5, 2008.
Farming and Manufacturing Exemptions
Public Chapter 1106, Section 24, clarifies that a person qualifying as a manufacturer shall not also qualify as a farmer or nurseryman for purposes of the applicable sales and use tax exemptions.
Effective date: June 5, 2008.
Qualified Data Centers: Computer Exemption
Public Chapter 1106, Section 25, provides that the exemption for computers, computer networks, and computer software used in a qualified data center includes warranty or service contracts for such equipment.
Effective date: June 5, 2008.
Qualified Data Centers: Investment Period
Public Chapter 1106, Section 26, provides that the Commissioner of Economic and Community Development may extend, for a reasonable period not to exceed two years, the period during which a data center must invest $250 million in order to qualify for certain tax incentives.
Effective date: June 5, 2008.
Sales and Use Tax Compliance Agreements: Tax Credits
Public Chapter 1106, Sections 27-28, authorizes the Commissioner of Revenue to enter into managed compliance agreements with taxpayers in order to facilitate the calculation of the qualified headquarters facility, emerging industry, or major cultural attraction credits. For these purposes, an eligible taxpayer is one who has qualified to receive the credit, demonstrates a willingness and ability to comply with the tax laws of this state, maintains an acceptable system of internal controls and business records, and cooperates with Tennessee's efforts to collect tax. In addition, "managed compliance agreement" is defined as an agreement between the Commissioner and an eligible taxpayer that provides for an agreed upon method for calculating the credit due.
Effective date: June 5, 2008.
Qualified Headquarters Credit: Use Tax on Relocated Property
Public Chapter 1106, Section 29, provides that taxpayers moving tangible personal property into Tennessee in conjunction with establishing a qualified headquarters facility are exempt from the sales and use tax that arises as a result of moving such property into the state, provided that the property was previously used in the operation of the taxpayer's business.
Effective date: June 5, 2008.
Qualified Headquarters Credit: General Partnerships
Public Chapter 507 extends the exemption on farm products to include the sale of farm or nursery products directly from a farmer to a consumer via a nonprofit online farmers' market.
Effective date: January 1, 2008.
Motor Vehicle Transfer
Public Chapter 1106, Section 30, provides a method for calculating the amount of tax due on motor vehicles transferred from inventory by an automobile manufacturer for its own use. The tax is to be calculated for each month during the term of use by multiplying the tax rate by an amount equal to one forty-eighth (1/48) of the wholesale price of the motor vehicle. "Wholesale price" is defined as the price at which motor vehicles of the same make and model were regularly sold to automobile dealers when the vehicle was removed from inventory.
Effective date: July 1, 2008.
Review of Tax Exemptions
Public Chapter 1106, Section 31, repeals statutory provisions regarding the periodic review of sales and use tax exemptions.
Effective date: June 5, 2008.
Electronic Filing
Public Chapter 1106, Section 32, provides that a taxpayer who is required to file sales and use tax returns electronically for any one outlet, location, or other place of business may be required to file returns electronically for each location.
Effective date: June 5, 2008.
Sales Tax Holiday
Public Chapter 617 established April 25 through April 27 as the dates for the 2008 spring sales tax holiday.
Effective date: March 11, 2008.
County Revenue Partnership Fund
Public Chapter 1057 establishes the "county revenue partnership fund" within the local government fund. Any apportionment to the fund can only be made in a specific dollar amount in the general appropriations act. Any revenue appropriated to the fund shall be allocated and distributed to all counties and metropolitan governments in Tennessee monthly by the commissioner of finance and administration, in the proportion as the population of each county or metropolitan government bears to the aggregate population of the state.
Effective date: August 1, 2008.
Registration Fees
Public Chapter 1007, Section 1, deletes obsolete language regarding the refund of registration fees. The referenced refund provision was previously repealed.
Effective date: July 1, 2008.
Temporary Operation Permits
Public Chapter 1007, Section 2, makes a technical correction clarifying that the Commissioner of Revenue may delegate to a designee the authority to issue temporary operation permits.
Effective date: July 1, 2008.
Illustration of Plates on Registration Renewal Applications
Public Chapter 1007, Section 3, removes the requirement that an illustration of ten or more specialty plates appears on the registration application form, and leaves the number of plates appearing on the form to the Commissioner's discretion.
Effective date: July 1, 2008.
Emergency Personnel Plate
Public Chapter 1007, Section 4, amends the language of the emergency license plate provision to add the requirement that emergency medical technicians or paramedics not affiliated with a local rescue squad must present a current license for issuance of the plate.
Effective date: July 1, 2008.
Issuance of Disabled License Plates
Public Chapter 1007, Section 5, permits the issuance of disabled license plates to parents or legal guardians of permanently disabled individuals who do not own and are incapable of operating a motor vehicle.
Effective date: July 1, 2008.
Transfer of Registration of a Fleet Vehicle
Public Chapter 1007, Section 6, permits the owner of a fleet vehicle subject to the International Registration Plan (IRP) to transfer the registration to a replacement vehicle within the same calendar month or to obtain credit for the number of months remaining in the registration year.
Effective date: September 1, 2008.
Proportionally Registered Fleet Vehicles
Public Chapter 1007, Section 7, permits the owner of a fleet vehicle to register the vehicle in Tennessee under the International Registration Plan (IRP) without obtaining a Tennessee certificate of title if the vehicle is already titled in another state, subject to approval by the Commissioner of Revenue.
Effective date: July 1, 2008.
Fleet Titling and Registration
Public Chapter 1007, Sections 8 and 9, authorizes the Department of Revenue to enter into agreements under which business entities that own a fleet of at least 200 motor vehicles would provide services regarding the titling, registration, and issuance of highway user fuel tax permits for motor vehicles within the business entity's fleet.
Effective date: July 1, 2008.
University of Tennessee Lady Vols Plate
Public Chapter 1007, Section 10, amends the language of the University of Tennessee Lady Volunteers specialty plate provision to commemorate the team's eighth national championship.
Effective date: July 1, 2008.
Title and Registration Fees
Public Chapter 924 repeals the sunset provision applicable to the $1 fee for motor vehicle registrations earmarked to fund the TRUST system, so that the fee stays in effect after June 30, 2008. The chapter also revises certain fees retained by county clerks and the state as compensation for services. It sets the fee for temporary operation permits at $10.00 and provides that the county clerk shall retain $4.50 for any such permits issued through the clerk's office. It increases the clerk's fee for mail ordering decals from $1.00 to $2.00 and increases the clerk's fee for issuing dealer plates from $1.25 to $2.00. The fee retained by the clerk for issuing replacement certificates of registration is increased from $0.50 to $3.00. The chapter also adds a new handling fee of $1.00 for a county clerk's issuance or renewal of cultural, specialty earmarked, and new specialty earmarked license plates, but the fee does not apply to any plates issued free of charge. It deletes the requirement that $0.50 of the $5.50 clerk's fee for issuing titles and duplicate titles be sent to the state general fund and concurrently raises by $0.50 the state's fee for issuing titles and duplicate titles.
Effective date: July 1, 2008, except the $1.00 fee for issuance or renewal of special plates is effective January 1, 2009.
Low Speed Vehicles
Public Chapter 719 revises the definition of "low speed vehicle" to include gasoline powered vehicles. Previously, the definition included only electric vehicles.
Effective date: April 10, 2008.
Medium Speed Vehicles
Public Chapter 959 amends the definition of "motor vehicle" to include medium speed vehicles. This chapter also defines "medium speed vehicle" as a four-wheeled electric or gasoline powered vehicle, excluding golf carts, whose top speed is greater than thirty miles per hour (30 mph) but not greater than thirty-five miles per hour (35 mph). This chapter creates a registration fee of $9.50 for medium-speed vehicles.
Effective date: July 1, 2008.
Custom-built Cars
Public Chapter 765 defines "custom built car" as a motor vehicle that is built for private use and is not constructed by a licensed manufacturer or re-manufacturer. This chapter also provides that a custom built car for which no certificate of title has ever been issued may be titled as the make, model, and year of the car it most closely resembles. This chapter also requires that the certificate of title clearly identify the car as a replica.
Effective date: April 21, 2008.
Motor Vehicle Dismantlers and Scrap Metal Processors
Public Chapter 1026 deletes the term "dealer" and substitutes in its place "any motor vehicle dismantler and recycler, required to be licensed pursuant to Section 55-17-109, or scrap metal processor as defined in Section 55-3-211" as those who purchase motor vehicles for purposes of dismantling such vehicles. The chapter also requires such purchasers to require sellers of such vehicles to show proof of ownership in the form of the certificate of title. In lieu of the title, this chapter permits sellers to provide other specified proof of ownership, but only if the vehicle is ten years or older and is purchased solely for parts, dismantling, and/or scrap. The required records must be maintained by the purchaser for three years. This chapter authorizes a court to order restitution against a seller in the event the seller's violation of this provision results in damages to the purchaser. For purposes of these provisions, the term "motor vehicle" does not include motor vehicles that have been flattened, crushed, baled, or logged and sold for purposes of scrap metal only.
Effective date: July 1, 2008.
Early Registration Renewal
Public Chapter 1196 allows a motor vehicle owner who will be out of state during his or her annual registration plate renewal month to apply for and receive early renewal during the ninety-day period immediately preceding such annual registration renewal month. This chapter also provides that the Commissioner of Revenue shall provide all registration plates, tabs, stickers and other required devices to county clerks at least ninety days prior to each registration period to facilitate such early renewal.
Effective date: July 1, 2008.
Recycling Used License Plates
Public Chapter 605 requires the Department of Revenue to create a program that promotes and permits the recycling of used or outdated registration plates, and requires each county facility where plates are issued to provide a location for a recycling bin for such plates.
Effective date: July 1, 2008.
Motor Vehicle Dealer Licensing: Surety Bonds
Public Chapter 736 increases the amount of the surety bond, from $25,000 to $50,000, that must accompany new license applications for or the renewal of a motor vehicle dealer license and removes the ability to use a letter of credit in lieu of a bond.
Effective date: Applies to all new license applications, license renewals and the replacement of expired bonds submitted to the motor vehicle commission on or after July 1, 2008.
Motor Vehicle Dealer Licensing: Exemption
Public Chapter 875 allows an exemption from motor vehicle dealer license requirements for an operator of a permanent auction facility that meets numerous criteria, including the following: the facility sells large construction equipment, sells used motor vehicles whose total value does not exceed fifteen percent (15%) of the total value of all equipment sold, and sells only motor vehicles with a gross vehicle weight rating of at least 10,000 pounds or that were used by a construction, common carrier, or transportation company in its normal business operations.
Effective date: July 1, 2008.
New Specialty Earmarked License Plates
Public Chapter 1145 provides that all nonprofit organizations for which new specialty earmarked license plates are issued on or after July 1, 2008, must be certified for nonprofit status by the secretary of state prior to such plates' initial issuance. This chapter also requires nonprofit organizations to submit an annual accounting of all such funds received from the sale of new specialty earmarked license plates to the Comptroller of the Treasury, and provides that the Comptroller of the Treasury may audit any nonprofit organization receiving such funds to ensure that such funds are being used in accordance with statutory authority. The chapter further provides that a nonprofit organization receiving funds in violation of statutory authority must return any proceeds received and shall be subjected to appropriate legal action to be instituted by the Attorney General and Reporter.
Effective date: July 1, 2008.
Temporary Trailer Permits
Public Chapter 1144 permits the issuance of temporary permits for trailers, not subject to registration in Tennessee, for operation on streets and highways in Tennessee for a temporary period of no more than five (5) days. This chapter provides that the fee for such permit is $9.00.
Effective date: June 13, 2008.
Specialty Plates
Public Chapter 1165 creates several new specialty license plates:
- National Rifle Association (NRA)
- Share the Road
- Appalachian Trail Conservancy
- Autism Awareness
- Tennessee Urban Forestry Council
- Appalachian Bear Rescue
- Mitochondrial Disorder
- Mothers Against Methamphetamine (MAMA)
- Veterans of Foreign Wars (VFW)
- Military Family Assistance
- Tennessee Association of Realtors
- Tennessee Performing Arts Center (TPAC)
- Tennessee Emergency Medical Services Education Association (TEMSA)
- Ford Foundation
- Tennessee Councils of the Boy Scouts of America
- Appalachian Quilt Trail
- Tennessee Wildlife Federation Non-Game and Education Programs
- Shriners
This chapter further permits the issuance of the following specialty license plates under the category of "Emergency": Tennessee State Guard, U.S. Coast Guard Auxiliary, and on-call surgical personnel.
This chapter further revises the name of the "Women Veterans of America" license plates to "Tennessee Woman Veteran." It further provides that vehicles registered with the Tennessee Association of Realtors shall be deemed not to be commercial vehicles. It also permits a person who has obtained a Holder of the Purple Heart plate to receive additional plates upon payment of the regular registration fee and the fee equal to the cost of producing the plate. This chapter reissues the Bryan College collegiate license plate. It further provides that the Shriners new specialty earmarked license plate and the Bryan College collegiate license plate shall not be subject to the requirement that three years expire prior to re-issuance of the plates.
This chapter authorizes the issuance of the Masons new specialty earmarked license plate to owners of motorcycles. It also reauthorizes the "Gold Star Mothers" memorial license plate as the "Gold Star Family" plate and expands eligibility for such plates to any person whose spouse, parent, sibling, or child died in the line of duty in the U.S. armed forces.
The public chapter also extends, until July 1, 2009, the time period for the Trout Unlimited, 101st Airborne Division Air Assault, Sandhill Crane, Civil War Preservation, Nashville Predators, Historic Franklin, and National Association for Stock Car Auto Racing, Inc. (NASCAR) license plates to meet all issuance requirements.
Effective date: June 14, 2008 for purposes of extending the time periods for certain specialty plates to meet all issuance requirements and July 1, 2008 for all other purposes.
License Plate Revenue - Art Commission Grants
Public Chapter 673 revises the amount of new specialty license plate revenue that the Tennessee Arts Commission may award in grants prior to distribution to urban and rural arts organizations from $393,600 to 50 percent of revenue collected for such plates.
Effective date: April 1, 2008.
High Occupancy Vehicle Lanes - Low Emission and Energy Efficient Vehicle
Public Chapter 1121 permits the operation of inherently low-emission motor vehicles and low-emission and energy efficient motor vehicles in HOV lanes in Tennessee, regardless of the number of occupants. Upon presenting proper documentation, qualified applicants will receive a sticker or decal from the Department of Revenue. The Departments of Revenue and Transportation will approve the sticker or decal in consultation with the Department of Safety.
Effective date: Effective date: June 13, 2008 for purposes of rulemaking and January 1, 2009 for all other purposes.
Disabled Parking: Definition of Disabled Drivers and Passengers
Public Chapter 777 revises the definition of disabled drivers and passengers eligible to receive a disabled plate or placard to include persons with 20/200 vision or worse in both eyes with correcting glasses.
Effective date: July 1, 2008.
Disabled Parking: Issuance of Placards
Public Chapter 1001 allows the issuance of disabled driver placards to an agency that leases motor vehicles permanently equipped with a wheelchair ramp or lift to disabled clients. This chapter directs the forfeiture of any placard for unauthorized use of the placard. This chapter further provides that violation of this section constitutes a Class B misdemeanor punishable by a fine of $200.00.
Effective date: July 1, 2008.
Disabled Parking: Parking Space Requirements
Public Chapter 956 requires businesses to provide disabled parking spaces, and requires that if at least four disabled parking spots are provided, one parking space should be van accessible. The chapter further amends the language to specify the sizes of the parking spaces and to require the sign in each van accessible parking space that is constructed after January 1, 2009 to state "Van Accessible - Priority for Wheelchair User."
Effective date: Applies to parking spaces constructed after January 1, 2009.
Disabled Parking: Penalties for Unauthorized Use
Public Chapter 909 increases the fine, from $150.00 to $200.00, for unauthorized parking in a space limited to disabled drivers and passengers, and adds a requirement that a violation of this statute subjects a person to five hours of community service.
Effective date: July 1, 2008.