(1) Any local
government imposing a local sales tax may provide that it will collect its tax
by means of its own officers and employees; promulgate rules and regulations
which are not inconsistent with the state and sales and use tax law or the
rules and regulations promulgated thereunder; adopt the state rules and
regulations as they may be promulgated or changed form time to time; adopt
provisions imposing penalty and interest; and use the same powers that are
available to the Commissioner to administer the state sales tax law, make
refunds for tax, penalty and/or interest collected improperly, and enforce
payment by means of distress warrants, liens, injunction, etc. Provided,
however, that no local government collection its own tax may prescribe or
require a bracket system for the shifting of the tax burden to the consumer of
tangible personal property or services, such bracket system being calculated to
include the amount of the state tax in addition to the local tax, unless such
bracket system shall be been approved specifically by the
Commissioner.
(2) The Commissioner
an the Department shall deem it feasible to collect, and shall collect any
local sales tax under the following conditions.
(a) The resolution or ordinance imposing the
local sales tax shall provide that:
1. The
Department shall collect the sales or use tax, penalty and interest.
2. Penalty and interest shall be imposed and
collected in the same manner as the penalty and interest is imposed and
collected by and for the state.
3.
The state rules and regulations as promulgated and as may be amended, changed,
added or rescinded by the Commissioner for the state sales tax shall apply to
the local sales tax and the administration of the local tax.
4. A local official shall be designated to
receive any notice of a payment made under protest to the Commissioner, which
the Commissioner will give to the county, city or town, and be the official
against whom suit, if any, may be brought for recovery of any tax, penalty and
interest which the Commissioner has collected and which is alleged by the
taxpayer to be illegal or improper.
(b) The Commissioner shall have the right to,
and shall proceed to do all things necessary to collect the tax, penalty and
interest, enforce payment by any means available now and later available to the
state to collect the state sales tax, make any necessary adjustments and
refunds of the locally imposed tax, penalty and interest as may be necessary,
and file any claims necessary in any court involving delinquent, insolvent, or
bankrupt taxpayers, for the locally imposed tax, penalty and
interest.
(c) The Commissioner
shall undertake to defend any locally imposed tax insofar as a determination of
the state tax will govern liability for a local sales tax, in the courts of
Davidson County, Tennessee, only. Where there is no determination of a state
tax to be made, and there is an alleged illegal payment to the Commissioner and
suit is brought to recover the payment, the officer designated in the
resolution or ordinance imposing the tax shall be named as the defendant, and
shall do all things necessary to defend the action; such action shall be
brought in the courts of the county where the tax is imposed.
(d) The county, city, or town imposing the
local sales tax shall agree to pay a sufficient amount to the Commissioner to
reimburse the Department for any costs involved in administering the local
sales tax.
(e) The combined state
and local tax rate must be a multiple of .25. Example: 7.75% but not
7.875%.
