Tennessee senator Bo WatsonNASHVILLE - A local lawmaker is fighting to make the state Revenue Department restore a practice in which agency tax rulings on a particular business are made publicly available as long as any information that identifies the company or reveals a business's trade secrets is removed.
Sen. Bo Watson, R-Hixson, said Monday that the bill, scheduled to come before the Senate Finance Committee this morning, requires that "letter rulings" and "revenue rulings" issued by the department be open to the public.
"It's really more an issue of transparency," Watson said. "People ask for an advisory opinion. If it's not releasing proprietary or highly confidential information, and if certain information can be redacted to where it doesn't create those kind of problems, then why should the public not know?"
The National Federation of Independent Business-Tennessee, which advocates for small businesses, is pressing to resume the previous practice of posting redacted rulings, halted in 2008.
"It's about transparency and consistency and fairness," said NFIB-Tennessee Executive Director Jim Brown. "It's about applying the same standard to companies regardless of size."
Letter rulings are issued in response to particular facts presented and are not intended necessarily as statements of department policy, according to older rulings still available on Revenue's website. They also are binding on the department with respect to the individual taxpayer addressed in the ruling.
A revenue ruling is advisory in nature and is not binding on Revenue Department officials. It is a statement regarding the substantive application of law and statements of procedure that affect the rights and duties of taxpayers and other members of the public.
Watson's bill, sponsored in the House by Speaker Pro Tem Judd Matheny, R-Tullahoma, requires Revenue to make redacted versions of its advice to companies available going back to 2008. That is when the practice halted under then-Revenue Commissioner Reagan Farr.
While the bill has yet to move in committee, it already is having an effect, Brown said, noting Revenue Department officials have contacted him to discuss the bill recently. He said a compromise might involve making redacted versions available in the future.
Revenue Commissioner Richard Roberts said, "We are having discussions about that." He noted a key to an "effective taxation system is the belief that a taxpayer can have confidentiality."
"Anything we do in that arena, we have to make sure that whatever we publish of a letter ruling adequately removes any identification of the taxpayer," he said. "So we're working on that, and we believe that those are educational and helpful to other taxpayers when it comes to compliance."
Watson said he hasn't heard anything from Revenue officials and as of late Monday afternoon still planned to present the bill today.
Brown said his members "feel strongly" about the issue and noted the federal Internal Revenue Service "posts its rulings and you know what the rules are going into a revenue hearing or an audit procedure. You want to know what those state rules are so you have a fair, equitable playing field."
It is important, Brown argued, to "make sure that if you're a small-business owner, you're treated the same as any business owner - any size business owner. Whether you have an army of lobbyists or whether you don't, the rules are the same for everybody."
Contact staff writer Andy Sher at asher@timesfree press.com or 615-255-0550.