2023 Tennessee Code › Title 67 - TAXES AND LICENSES (§§ 67-1-101 — 67-10-107) › Chapter 4 - PRIVILEGE AND EXCISE TAXES (§§ 67-4-101 — 67-4-3206) › Part 7 - BUSINESS TAX ACT (§§ 67-4-701 — 67-4-730) › Section 67-4-724 - Distribution of taxes - Retention by state in general fund of taxes, interest and penalties assessed due to audit

(a)
The tax levied by the state under §
67-4-704
, including any associated interest and penalties, shall be distributed as follows:
(1)
An amount equal to seven dollars ($7.00) per return shall be paid to the county clerk with respect to each tax return filed under §
67-4-715
by a taxpayer that is either located within the county or otherwise obtains a license under §
67-4-723(a)
. Of that amount, three dollars ($3.00) shall be earmarked for computer hardware purchases or replacement, but may be used for other usual and necessary computer-related expenses at the discretion of the county clerk. The amount shall be preserved for these purposes and shall not revert to the general fund at the end of a budget year if unexpended;
(2)
After the distribution provided in subdivision (a)(1), an amount equal to five percent (5%) of the remaining proceeds of the tax shall be paid to the county clerk in the case of returns filed under §
67-4-715
by taxpayers located or otherwise licensed under §
67-4-723(a)
within the county;
(3)
After the distributions provided in subdivisions (a)(1) and (2), forty-two and sixty-two hundredths percent (42.62%) of the remaining proceeds of the tax shall be earmarked and allocated specifically and exclusively to the state's general fund;
(4)
After the distributions provided in subdivisions (a)(1)-(3), an administration fee of one and one hundred twenty-five thousandths percent (1.125%) of the remaining proceeds of the tax shall be allocated to the department to cover the expenses of administration and collection;
(5)
After the distributions provided in subdivisions (a)(1)-(4), the remaining proceeds of the tax collected under §
67-4-704
shall be distributed to the county in which the taxpayer has established a physical location, outlet, or other place of business from which the sales are made.
(b)
The tax levied by an incorporated municipality under §
67-4-705
, including any associated interest and penalties, shall be distributed as follows:
(1)
An amount equal to seven dollars ($7.00) per return shall be paid to the appropriate city official with respect to each tax return filed under §
67-4-715
by a taxpayer that is either located within the municipality or otherwise obtains a license under §
67-4-723(a)
;
(2)
After the distribution provided in subdivision (b)(1), an amount equal to five percent (5%) of the remaining proceeds of the tax shall be paid to the appropriate city official in the case of returns filed under §
67-4-715
by taxpayers located or otherwise licensed under §
67-4-723(a)
within the municipality;
(3)
After the distributions provided in subdivisions (b)(1) and (2), forty-two and sixty-two hundredths percent (42.62%) of the remaining proceeds of the tax shall be allocated to the general fund of the state. Any allocation or distribution of amounts from the general fund for local purposes shall be deemed first derived from the proceeds directed into the general fund under this subdivision (b)(3);
(4)
After the distributions provided in subdivisions (b)(1)-(3), an administration fee of one and one hundred twenty-five thousandths percent (1.125%) of the remaining proceeds of the tax shall be allocated to the department to cover the expenses of administration and collection;
(5)
After the distributions provided in subdivisions (b)(1)-(4), the remaining proceeds of the tax collected by the commissioner under §
67-4-705
shall be distributed to the municipality that levied the tax.
(c)
Notwithstanding subsections (a) and (b), one hundred percent (100%) of the tax, interest, and penalty collected from a taxpayer that does not have either a license under §
67-4-723(a)
or an established physical location, outlet, or other place of business in any county or incorporated municipality in the state shall be earmarked and allocated specifically and exclusively to the state's general fund. In addition, one hundred percent (100%) of the amount of any tax, interest, and penalty assessed by the commissioner pursuant to §
67-4-704
or §
67-4-705
as a result of an audit of the taxpayer's books and records shall be earmarked and allocated specifically and exclusively to the state's general fund. In addition, one hundred percent (100%) of the tax, interest, and penalty collected from any person described in §
67-4-708(5)
and taxable under §
67-4-709(5)
shall be earmarked and allocated specifically and exclusively to the state's general fund.
(d)
The fee levied by a county or incorporated municipality under §
67-4-710
, including any associated interest and penalties, shall be retained by the county or incorporated municipality that levied the fee. Notwithstanding the preceding sentence, an amount equal to five percent (5%) of the proceeds of the fee shall be paid to the county clerk, in the case of fees collected under §
67-4-710
by a county, and to the appropriate city official, in the case of fees collected under §
67-4-710
by a municipality.
Amended by 2023 Tenn. Acts, ch. 377, s 12, eff. 4/1/2024.
Amended by 2023 Tenn. Acts, ch. 377, s 11, eff. 4/1/2024.
Amended by 2019 Tenn. Acts, ch. 404, s 1, eff. 5/17/2019.
Amended by 2014 Tenn. Acts, ch. 764, Secs.s 2, s 2 eff. 4/24/2014.
Amended by 2014 Tenn. Acts, ch. 942,s 7, eff. 7/1/2014.
Amended by 2013 Tenn. Acts, ch. 313, s 21, eff. 1/1/2014.
Acts 1972, ch. 850, §§ 15-18; 1978, ch. 714, §§ 2, 3; 1980, ch. 885, § 16; T.C.A., §§ 67-5823 -- 67-5826; Acts 1984, ch. 832, §§ 32, 33; 1988, ch. 526, § 34; 1989, ch. 340, § 1; 2002, ch. 856, § 9d; 2009 , ch. 530, § 92.