67-6-540 - Managed compliance agreement with eligible dealers. - Tennessee Statutes

67-6-540. Managed compliance agreement with eligible dealers.

(a)  The commissioner may, in the commissioner's sole discretion, enter into a managed compliance agreement with an eligible dealer. Such agreement may provide for:

     (1)  One (1) or more effective use tax rates for purchases subject to tax under this chapter;

     (2)  A procedure under which the eligible dealer can use a direct pay permit issued by the commissioner to purchase tangible personal property or services without paying to its supplier the tax imposed by this chapter;

     (3)  A term not to exceed three (3) years, provided nothing shall preclude the commissioner from entering into a subsequent agreement with the same dealer;

     (4)  The conditions under which the agreement may require modification or termination;

     (5)  A procedure to resolve disputes concerning the agreement; and

     (6)  Any such other provisions as the commissioner and the eligible dealer mutually agree upon to carry out the purposes of this section.

(b)  The commissioner may, in the commissioner's sole discretion, terminate a managed compliance agreement and conduct an audit of an eligible dealer if the eligible dealer fails to fulfill any of the terms of a managed compliance agreement and such failure is materially adverse to the commissioner and the dealer fails to cure such failure not later than thirty (30) days after the mailing of written notice of such failure by the commissioner; provided, however, that no such notice need be given in the event such failure is not capable of being cured or the commissioner believes that the collection of any tax required to be collected and paid to the state or of any assessment will be jeopardized by delay.

(c)  Other than as authorized by this section and expressly agreed in the managed compliance agreement, nothing in this section shall abridge or alter any requirements, rights, or obligations of an eligible dealer or the commissioner granted or imposed by statute or regulation.

(d)  For purposes of this section:

     (1)  “Effective use tax rate” means the rate of use tax to be applied against a predetermined base of purchases for the purpose of computing the eligible taxpayer's use tax liability for a defined period;

     (2)  “Eligible dealer” means any person who is required to file any return or to pay or remit any tax under this chapter and who, in the opinion of the commissioner, meets the following criteria:

          (A)  Demonstrates a willingness and ability to comply with the tax laws of this state;

          (B)  Maintains an acceptable system of internal controls and business records;

          (C)  Maintains a large volume of taxable purchases; and

          (D)  Cooperates with Tennessee's efforts to collect tax; and

     (3)  “Managed compliance agreement” means an agreement between the commissioner and an eligible taxpayer that provides for an agreed upon method for calculating and remitting use tax on that taxpayer's purchases.

[Acts 2004, ch. 786, § 3.]