2023 Tennessee Code › Title 7 - CONSOLIDATED GOVERNMENTS AND LOCAL GOVERNMENTAL FUNCTIONS AND ENTITIES (§§ 7-1-101 — 7-91-104) › MUNICIPAL FUNCTIONS (§§ 7-31-101 — 7-41-111) › Chapter 40 - BORDER REGION RETAIL TOURISM DEVELOPMENT DISTRICT ACT (§§ 7-40-101 — 7-40-113) › Section 7-40-104 - Requirements for apportionment of state sales and use taxes

(a)
To be entitled to receive the apportionment of state sales and use taxes as provided in this chapter, the requirements set forth in subdivisions (a)(1)-(4) shall be met.
(1)
A municipal legislative body shall adopt an ordinance designating the boundaries of the border region retail tourism development district; provided, however, that no municipality shall contain more than one (1) such district.
(2)
The municipality shall then file a certified copy of the ordinance with the commissioner along with a request for certification of the district. The request shall include a master development plan for the proposed district containing such information as may be reasonably required by the commissioner. No change to, or deviation from, a master development plan for a district, once the district is certified, or change in, or deviation from, a project in a district that has been certified, shall result in a district losing its certification, or disqualification of any cost, so long as the district is reasonably anticipated to attain the thresholds set forth in §
7-40-103(7)
based on objective professional standards. In order to support decertification or disqualification of cost, the commissioner bears the burden of establishing that such change or deviation has caused the district to not be reasonably anticipated to attain the requisite thresholds set forth in §
7-40-103(7)
.
(3)
The commissioner shall promptly review the request to confirm that the proposed boundaries of the proposed border region retail tourism development district do not exceed the maximum size set forth in this chapter. If the commissioner determines that the boundaries of the proposed border region retail tourism development district exceeds the area allowed by this chapter, then the commissioner may adjust or reduce the boundaries of the proposed district in consultation with the municipality. In reviewing the request, the commissioner shall inform the commissioners of economic and community development and tourist development of the pending request.
(4)
If the commissioner, with approval by the commissioner of economic and community development, determines that the special allocation of state sales tax, as authorized by §
7-40-106
, is reasonably anticipated to attain the goals set forth in §
7-40-103(7)
based on applicable objective professional standards, then the commissioner shall approve the request and certify the district. Upon certification of the district, the commissioner shall provide prompt notice of the certification to the commissioner of economic and community development, the commissioner of tourist development, and the requesting municipal governing body.
(b)
Upon certification of the district, state sales and use taxes shall be apportioned and distributed to the municipality as provided in this chapter.
(c)
(1)
The apportionment and distribution of state sales and use taxes shall commence with the first fiscal year after the certification of the district for which the municipality has submitted a cost certification for that fiscal year as provided in this subdivision (c)(1). The base tax revenues shall be determined in accordance with the definition in §
7-40-103
, irrespective of whether a municipality filed a cost certification for the first year for which the municipality was entitled to receive an allocation of tax revenue. Within thirty (30) days after the end of each fiscal year for which a municipality is requesting an allocation of sales and use tax revenues, the municipality may submit to the commissioner a summary of the cost of the economic development project through the end of that fiscal year with supporting documentation certified by the chief financial officer of the municipality. The certification by the chief financial officer of the municipality shall be deemed an official act of that officer on behalf of the municipality, and that officer shall not be personally liable for any incorrect information in the certification. The commissioner shall review the cost certification to confirm that state sales and use taxes, in the amount determined by the commissioner, should be apportioned and distributed to the municipality pursuant to this chapter and shall notify the department of economic and community development of such.
(2)
With respect to a summary of costs that is submitted by the chief financial officer of the municipality on behalf of a developer that has incurred total project costs relative to an economic development project within the district in excess of three million dollars ($3,000,000), the costs must be compiled and certified by an independent certified public accountant licensed in this state prior to submission to the commissioner.
(d)
The certified district shall be dissolved following the expiration of thirty-five (35) years, or upon the date on which the cost of the project has been fully paid, whichever is sooner; provided, that the thirty-five-year period in this subsection (d) shall be concurrent with the time limitation established in §
7-40-106
.
(e)
Not later than June 30, 2019, any municipality in which a district has been certified may exclude, on a one-time basis, from the district for the remainder of the term that the district is certified, any property or properties initially included in the certified district by designating the exclusion of the property or properties by resolution of the legislative body of the municipality. A certified copy of the resolution shall be filed with the commissioner not later than sixty (60) days after adoption by the legislative body of the municipality. Upon exclusion, and except as provided in this subsection (e), the excluded property or properties shall be treated as if the property or properties were never included in the district for all purposes, including the calculation of base tax revenues, commencing with the fiscal year ending June 30, 2019, and the municipality shall not be entitled to receive any future incremental increases in tax revenues relating to businesses located on the excluded property or properties. Notwithstanding this subsection (e), the adoption of the resolution shall not affect any prior distribution relating to the district for any fiscal year ending on or before June 30, 2018.
(f)
For purposes of determining whether a business is located in the district, the commissioner shall rely on the address of the business as shown on the business's tax return.
(g)
If a municipality elects to remove properties from the certified district by designating the exclusion of the property or properties pursuant to subsection (e) other adjacent property or properties may become eligible to be included in the certified district in a total acreage amount less than or equal to the total acreage of those properties excluded. Inclusion of such property or properties must be designated by resolution of the legislative body of the municipality. A certified copy of the resolution shall be filed with the commissioner not later than sixty (60) days after adoption by the legislative body of the municipality. Upon inclusion, and except as provided in subsection (e) the included property or properties shall be treated as if the property or properties were included in the district for all purposes, including the calculation of base tax revenues, commencing with the fiscal year ending June 30, 2018, and the municipality shall be entitled to receive future incremental increases in tax revenues relating to businesses located on the included property or properties. Notwithstanding this subsection (g), the adoption of the resolution shall not affect any prior distribution relating to the district for any fiscal year ending on or before June 30, 2018.
Amended by 2024 Tenn. Acts, ch. 1006,s 4, eff. 5/28/2024.
Amended by 2024 Tenn. Acts, ch. 1006,s 3, eff. 5/28/2024.
Amended by 2021 Tenn. Acts, ch. 582, s 2, eff. 5/27/2021.
Amended by 2019 Tenn. Acts, ch. 511, Secs.s 3, s 4, s 6 eff. 6/3/2019.
Amended by 2019 Tenn. Acts, ch. 390, Secs.s 1, s 2, s 3 eff. 5/10/2019.
Amended by 2015 Tenn. Acts, ch. 405, Secs.s 1, s 2 eff. 5/8/2015.
Acts 2011 , ch. 420, § 5; 2012, ch. 1092, § 3.