67-6-394 - Credit for sales tax due on a transaction accommodation fee included in a sale or lease. - Tennessee Statutes

67-6-394. Credit for sales tax due on a transaction accommodation fee included in a sale or lease.

(a)  A credit shall be granted, in the manner provided in subsection (b), for the amount of the sales tax due on a transaction accommodation fee included in the sales price of a sale or the gross proceeds of a lease.

(b)  The credit shall apply such that sales tax is owed on the sales price or gross proceeds, less the transaction accommodation fee associated with such sale or lease.

(c)  For purposes of this section, the following definitions shall apply:

     (1)  “Full-time employee” means a permanent, rather than seasonal or part-time, employee who is normally scheduled to work at least thirty-seven and one half (37.5) hours per week, and receives minimal healthcare, as described in title 56, chapter 7, part 22;

     (2)  “Qualified motor vehicle manufacturer” means a producer, as defined in § 55-17-123(d)(2), that has made the required capital investment within the investment period necessary to qualify for the credit provided in § 67-4-2109(b)(2)(B)(i), or one of its related business entities;

     (3)  (A)  “Related business entity” means a business entity:

                (i)  In which the qualified motor vehicle manufacturer, directly or indirectly, has more than thirty-five percent (35%) ownership interest;

                (ii)  That, directly or indirectly, has more than thirty-five percent (35%) ownership interest in the qualified motor vehicle manufacturer; or

                (iii)  In which a person described in subdivision (c)(3)(A)(ii), directly or indirectly, has more than thirty-five percent (35%) ownership interest;

          (B)  For purposes of this subdivision (c)(3), a noncorporate entity is more than thirty-five percent (35%) owned, if, upon liquidation, more than thirty-five percent (35%) of the assets of the noncorporate entity, directly or indirectly, accrue to the entity having the ownership interest; and

     (4)  “Transaction accommodation fee” means the standard charge made by a franchised motor vehicle dealer to a qualified motor vehicle manufacturer in consideration for selling or leasing a motor vehicle produced by the qualified manufacturer to one (1) of the qualified manufacturer's full-time employees. Records documenting the amount of the standard transaction accommodation fee shall be maintained by the dealer in accordance with § 67-6-523.

[Acts 2005, ch. 499, § 84; 2006, ch. 1019, §§ 41, 42; 2009, ch. 530, § 11.]