Tennessee § 7-40-106 - Conditions for and duration of apportionment and distribution of state sales and use taxes.

§ 7-40-106. Conditions for and duration of apportionment and distribution of state sales and use taxes.

Notwithstanding the allocations provided for in § 67-6-103(a), if a municipality or industrial development corporation finances, constructs, leases, equips, renovates, assists, incents, or acquires an extraordinary retail or tourism facility or a project in a certified district, then seventy-five percent (75%) of state sales and use tax collected in the district in excess of base tax revenues shall be apportioned and distributed to the municipality in an amount equal to the incremental increase in state sales and use taxes derived from the sale of goods, products, and services within the district in excess of base tax revenues. Apportionment and distribution of such taxes shall continue for a period of thirty (30) years, or until the date on which all the cost of the economic development project, including any principal and interest on indebtedness, including refunding indebtedness of the municipality or industrial development corporation related to the development of the project have been fully paid, whichever is sooner. Following the expiration of this thirty-year period, or upon the date on which such cost has been fully paid, whichever is sooner, all amounts that would have otherwise been distributed to the municipality or retained in lieu of distribution shall be allocated as provided elsewhere without regard to this chapter. Tax revenue distributed to the municipality pursuant to this chapter shall be for the exclusive use of the municipality or the industrial development corporation formally designated by the municipality for payment of the cost of the economic development project, including principal and interest on indebtedness, including refunding indebtedness of the municipality or industrial development corporation related to the development of the project. The apportionment and payment shall be made by the department of revenue to the municipality within ninety (90) days of the end of each fiscal year for which the municipality is entitled to receive an allocation and payment pursuant to this chapter. If the commissioner determines that any cost included in a certification of a municipality submitted pursuant to § 7-40-104(c) is not a qualifying cost within the meaning of § 7-40-103, the commissioner shall promptly give notice of the determination to the municipality. Upon receipt of the notice, the municipality may contest the determination following the procedures set forth in § 4-5-223. If the commissioner determines that any cost is not a qualifying cost, the commissioner may not recoup, on such basis, any payment that has already been made by the commissioner to the municipality or industrial development board. However, the amount of the unqualified cost shall offset and reduce the amount of any future distribution of tax revenues to the municipality or industrial development board. The chief financial officer of the municipality may rely on certifications and documentation of third parties in connection with making any certification under this chapter unless the chief financial officer has actual knowledge that the certification or documentation by the third party is false. Once the commissioner has approved any cost, whether incurred by the municipality or, as a result of delegation, by an industrial development board or any developer acting by agreement with the municipality or industrial development board, such approval shall be deemed conclusive that the district is being developed for an extraordinary retail or tourism facility as described in § 7-40-103(7). Acts 2011, ch. 420, § 7; 2015, ch. 405, § 3; 2019, ch. 511, § 7. Compiler's Notes. Acts 2019, ch. 511, § 9 provided that the act shall apply retroactively to any district certified prior to June 3, 2019. No such certified district shall be decertified as a result of the amendments to the Border Region Retail Tourism development District Act, compiled in Title 7, Chapter 40, made by the act. Amendments. The 2015 amendment added the last five sentences in (c). The 2019 amendment added the eighth sentence to (c). Effective Dates. Acts 2015, ch. 405, § 5. May 8, 2015. Acts 2019, ch. 511, § 10. June 3, 2019.