I was not in the General Assembly in 2012 or else I would have sounded the alarm on this unprecedented bill which virtually allows a revenue agent a seat inside each business on a daily basis.
Every single State Senator voted for the bill while only a scant few House members voted against it.
Last year the Legislature further expanded this law by passing SB107 to now include ALL Tennessee businesses selling other categories of tangible personal property. This means that the Department of Revenue can force any wholesaler and any retailer to report their sales and purchase transactions between each other to the department. An extraordinary over reach of government equipped with fines if the report is not submitted!
Once again every Senator voted for the bill and only four House members voted no – Lynn, Dunlap, Sparks and Windle.
Both the 2012 Act and the 2015 expansion acknowledged the law’s very complex and burdensome reporting requirement because each authorizes the Commissioner to waive electronic filing for some businesses not equipped to submit so much data. A member of the soft drink industry reports that when he called the department to complain about this administrative-informational dragnet because his business simply does not keep the mandated information in the form that the department requires he was told that in lieu of filing electronically he could turn over all of his records to the Department!
These records were created at the expense of the business for its own operation - they have nothing to do with the business’ relationship to the government – and further the information is proprietary.
Citizens are protected from unreasonable searches and seizures by the Fourth Amendment - a search includes demands for uncompensated required information owned by the business. This law permits such searches, and subjects businesses to penalties for failure to provide it or for inaccuracy.
The due process clauses of the Fifth and Fourteenth Amendments to the United States Constitution shape the Doctrine of Procedural Due Process. Officials in the United States are required to follow fair procedures when making rules to enact laws before depriving a person of life, liberty, and property. The creation of procedures involves the public by way of the Uniform Administrative Procedures Act in Title 4 of the Tennessee Code – the UAPA allows enough time for the public to consider what is being required and to provide input. I am told that the advisory instructions for this law have been modified twice by the department in a rush – which means emergency rules were used. The process of emergency rule making is only for true emergencies – not for implementing a tax-deep dive program.
The state Legislature has permitted this draconian treatment of our Tennessee businesses both small and large with little thought of the effect of these very burdensome government regulations. A bill has been filed to repeal part of the Act. Let’s hope the legislators are willing to amend this abusive law that has imposed onerous, unreasonable and unconstitutional actions upon our Tennessee businesses.