Businesses in DeKalb County and across Tennessee who don’t have a business license and have not been paying taxes could receive amnesty under a plan meant to get them onto the state’s books.
The Department of Revenue says it will waive penalties for businesses that have been avoiding Tennessee’s business tax if they voluntarily register and agree to pay three years’ back taxes.
DeKalb County Clerk Mike Clayborn says the program, which started last month, comes after state officials discovered thousands of businesses not on the books when they took over collections from local clerks last summer. “We have been telling the folks that the business tax (administration) is being taken over by the state department of revenue. They have been checking each (county) clerk’s records against IRS records. They have already found some six thousand businesses (in the state) that are operating without a license.”
“What they propose to do is offer amnesty to any business owner (in violation) who will come forward. They will go back three years. You (violators) will have to pay based on what you’ve made during those three years. Of course, you’ll also have to get a business license. If you don’t do this (come forward) and they have to audit you, they’ll go back from six to ten years and you’ll have to pay penalty and interest for each one of those years. This will be offered for several months. So I would advise anyone who is operating without a business license to come forward because it is beneficial to you.”
” The two things they are looking for are people who are operating without a business license and people who are delinquent on the taxes they already owe. Those who are delinquent will not be offered amnesty. That’s only for those who do not have a business license. So again, if you’re operating without a business license, you need to contact the state department of revenue or come up by my office (in the courthouse) and we’ll give you the information and help you take care of that.”
“We (county clerks) will be out of the business tax business, where we used to could help people and advise people. Now it will all be handled through the Tennessee Department of Revenue. You will file your return to them, they’ll send out the paperwork to you. You will complete your return, turn it into them, and if everything adds up then they will email us to issue you a new license. If there’s any questions, they will take care of it. ”
This past legislative session, the 106th General Assembly enacted Public Chapter 530, shifting the administration and collection of business tax from local municipalities and counties to the Department of Revenue. With this change, the Department of Revenue will use its resources and experience in tax administration to collect the business tax, resulting in greater efficiency in the collection process and increased revenue for the State and for local governments.
“This undertaking is a true partnership between state and the local governments,” said Commissioner Reagan Farr. “While increasing revenue through improved tax compliance, we also plan on simplifying the tax process for business owners including developing a new, simplified tax return and initiating major education programs.”
Beginning with Classification 1 taxpayers, due Feb. 28, 2010, all business tax returns will now be filed with the Tennessee Department of Revenue. Businesses will continue to obtain business licenses from the county clerks and/or municipal officials.
The Department of Revenue is working closely with local municipalities and counties to make this transition a smooth process. The department is currently gathering registration data from the counties and cities to register the business owners and mail out tax returns by the end of 2009. More information is available at the Department of Revenue’s Web site www.TN.gov/revenue.
The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws established by the legislature and the collection of taxes and fees associated with those laws. The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2008-2009 fiscal year, the department collected $10.2 billion in state taxes and fees. In addition to collecting state taxes, $1.9 billion of local sales tax was collected by the department for local governments during the 2008-2009 fiscal year. Besides collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to www.TN.gov/revenue.