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2007 Legislative Summaries

The following are brief summaries of the 2007 legislative changes to statutes administered by or affecting the Tennessee Department of Revenue. The language used is not quoted from the law and should not be used as a substitute for the formal text. For a complete copy of a particular public chapter, please visit the Secretary of State's Web site at www.state.tn.us/sos. For upcoming notices and other information regarding these changes, please visit the department's Web site at www.Tennessee.gov/revenue.

These summaries are organized by subject matter. Some public chapters cover more than one subject and, therefore, appear in more than one section of the summary. Only the portions of a public chapter that are relevant to a particular section of the summary are included in that section.

Franchise and Excise Taxes

Sales and Use Tax

Other Legislation

Title and Registration

Alcoholic Beverages

 

Industrial Machinery Credit
Public Chapter 602, Section 1, revises Tennessee's economic development tax incentives by providing tiered levels of industrial machinery credit based on the level of Tennessee investment. The act establishes tiered criteria and benefits for the credit. If the taxpayer makes a required capital investment in excess of one billion dollars ($1,000,000,000) during the investment period, the credit allowed equals ten percent (10%) of the purchase price of industrial machinery located in Tennessee and purchased in the process of making the required capital investment. If the taxpayer makes a required capital investment in excess of five hundred million dollars ($500,000,000) during the investment period, the credit allowed equals seven percent (7%). If the taxpayer makes a required capital investment in excess of two hundred fifty million dollars ($250,000,000) during the investment period, the credit allowed equals five percent (5%). If the taxpayer makes a capital investment in excess of one hundred million dollars ($100,000,000) during the investment period, the credit allowed equals three percent (3%). The investment period cannot to exceed three (3) years from the filing of the business plan related to the required capital investment, during which the required capital investment must be made. The three-year period for making the required capital investment may be extended by the commissioner of economic and community development for a reasonable period, not to exceed two (2) years, for good cause shown.

Effective date: June 28, 2007.
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Headquarter Relocation Credit
Public Chapter 602, Section 2, revises Tennessee's economic development tax incentives by providing tiered levels of headquarters relocation credits based on the level of Tennessee job creation. The credit is equal to any qualified headquarters facility relocation expenses incurred by the taxpayer during the investment period for establishing a qualified headquarters facility, but is limited to a specified dollar amount (based on the number of jobs created) multiplied by the number of headquarters staff employee positions relocated by the taxpayer.

Effective date: June 28, 2007.
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Job Tax Credit
Public Chapter 602, Section 10, modifies the job tax credit by establishing a credit for a qualified business enterprise that involves a required capital investment of ten million dollars ($10,000,000) and the creation of at least one hundred (100) net new full-time headquarters staff employee jobs that pay at least 150% of Tennessee's average occupational wage. The credit allowed is five thousand dollars ($5,000) for each net new full-time headquarters staff employee job created during the investment period. An additional credit is allowed on an annual basis for a period of three (3) years, beginning with the first tax year after the investment and job threshold criteria are met. The additional credit equals five thousand dollars ($5,000) for each job created during the investment period, provided that the jobs remain filled by employees, at wages equal to or greater than one hundred fifty percent (150%) of Tennessee's average occupational wage for the month of January of the year in which the credit is being taken. This annual credit may be used to offset up to one hundred percent (100%) of the taxpayer's franchise and excise tax liability for that year, but any unused annual credit will not be carried forward beyond the year in which the credit originated.

Effective date: June 28, 2007.
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Job Tax Credit and Tiers of Economically Distressed Counties
Public Chapter 602, Sections 180-182, modifies the job tax credit by providing that the Department of Economic and Community Development shall designated each county determined to be economically distressed as a tier one, tier two or tier three economically distressed county. Such designation shall be based on unemployment, per capita income and poverty levels. A list of counties designated by tiers will be published annually. A qualified business enterprise located in a tier one, two or three economically distressed county will receive a $4,500 credit for each net new full-time employee job. A qualified business enterprise located in a tier two county will receive an additional annual credit of $4,500 for each net new full-time employee job, and the annual credit shall be allowed for a period of three years, beginning with the first tax year after the initial job tax credit is created. A qualified business enterprise located in a tier three county will receive an additional annual credit of $4,500 for each net new full-time employee job, and the annual credit shall be allowed for a period of five years, beginning with the first tax year after the initial job tax credit is created. The annual credit may be used to offset up to 100% of the franchise and excise tax liability, but it may not be carried forward beyond the year in which the credit originated.

Effective date: June 28, 2007.
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Motion Picture Production Credit
Public Chapter 602, Section 11, modifies the motion picture production credit by extending its application to the production of an episodic television program in Tennessee.

Effective date: June 28, 2007.
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Tennessee Rural Opportunity Fund Credit
Public Chapter 602, Section 12, creates a credit in an amount equal to ten percent (10%) of a financial institution's contribution to the Tennessee Rural Opportunity Fund. The credit is allowed each year for a period of ten (10) years, beginning with the tax year in which the contribution is made. Any unused credit cannot be carried forward beyond the tax year in which the credit originated. The loaning of funds by the taxpayer to the Tennessee Rural Opportunity Fund shall constitute a contribution. However, if at the close of the tenth year of the period during which the credit is allowed, the taxpayer or its assignee has received repayment, or retains any right to repayment, of all or any portion of the amount contributed or any interest accrued thereon, the credit plus interest will be recaptured in the first tax year following the ten-year period during which the credit is allowed.

Effective date: June 28, 2007.
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Barge Company Apportionment
Public Chapter 602, Sections 13-14, applies the same apportionment provisions to barge companies that currently apply to other common carriers such as motor carriers, air carriers, and railroads. Specifically, the apportionment ratio is the mathematical average of two ratios, the first of which is based on revenues and the second of which is based on miles operated.

Effective date: Applies to tax years ending on or after July 1, 2007.
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Excise Tax and S Corporations
Public Chapter 602, Sections 15-16, closes a loophole that allowed an S corporation that makes an election under Section 338(h)(10) of the Internal Revenue Code to treat a sale of its stock as an asset sale, without including the resulting gain or loss in its Tennessee net earnings. The S corporation is now required to include in net earnings or loss any gain or loss attributable to the Section 338(h)(10) election.

Effective date: October 1, 2007, applying to all transactions occurring on or after that date.
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Recognition of Gain on Assets Having a Higher Tennessee Basis
Public Chapter 602, Section 17, provides, for Tennessee excise tax purposes, that a company must recognize gain or loss on the sale of an asset based on the asset's federal tax basis without any adjustment as a result of the taxpayer not having been subject to Tennessee excise tax during any portion of the period during which the taxpayer took depreciation expense on the asset for federal income tax purposes.

Effective date: June 28, 2007.
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Bankruptcy Remote Entity
Public Chapter 602, Sections 19-20, amends the provisions relating to the joint and several liability of members of a financial institution unitary group. A bankruptcy remote entity within a unitary group of financial institutions will be subject to the franchise and excise taxes, but will not be jointly and severally liable for the tax liability of the entire group. To qualify, the bankruptcy remote entity must be a limited liability company, limited liability partnership, or limited partnership. Additionally, the entity must have been formed and operated for the primary purpose of acquiring, from one or more of its direct or indirect owners, notes, accounts receivable, installment sale contracts, or similar evidences of indebtedness, and must have pledged substantially all of its assets as security, directly or indirectly, for third party borrowings or securitized indebtedness acquired by third parties. Alternatively, substantially all of the entity's assets must consist of the assets described above, cash and cash equivalents, third party debt securities, or equity interests in entities meeting the operational requirements listed above.

Effective date: June 28, 2007.
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Diversified Investing Funds
Public Chapter 602, Section 21, allows an exempt diversified investing fund to organize as a business trust.

Effective date: June 28, 2007.
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Sales Tax Reduction on Food and Food Ingredients
Public Chapter 600 reduces the sales tax on food and food ingredients from 6% to 5.5%. Prepared food, alcoholic beverages, candy, dietary supplements, and tobacco remain subject to sales tax at the rate of 7%.

Effective date: January 1, 2008.
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Sales Tax Holiday
Public Chapter 534 adds school art supplies with a sales price of $100 or less to the list of items that are exempt during a sales tax holiday. “School art supplies” are defined as: clay and glazes; paints, acrylic, tempera, and oil; paintbrushes for artwork; sketch and drawing pads; and watercolors.

Effective date: June 27, 2007.

Public Chapter 600 adds a new, one-time sales tax holiday beginning at 12:01 a.m. on Friday, March 21, 2008 and ending at 11:59 p.m. on Sunday, March 23, 2008. This additional sales tax holiday applies to the following items, which are also exempt during the annual sales tax holiday occurring on the first weekend of August: (1) clothing with a sales price of one hundred dollars ($100) or less; (2) school supplies and school art supplies with a sales price of one hundred dollars ($100) or less; and (3) computers with a sales price of one thousand five hundred dollars ($1,500) or less.

Effective date: Upon becoming law. Top

 

Streamlined Sales and Use Tax
Public Chapter 357 enacted in 2003 and Public Chapter 959 enacted in 2004 made numerous changes to the Retailers’ Sales Tax Act to bring Tennessee into compliance with the national streamlined sales and use tax project.  Those changes were scheduled to become effective on July 1, 2007. Public Chapter 602, Sections 51-178, delays the effective date of those changes. The following provisions will become effective on January 1, 2008: 1) most of the streamlined sales tax uniform definitions; 2) provisions concerning the registration of farmers for sales tax exemption purposes; 3) provisions concerning exempt medical products; 4) provisions concerning the optional centralized registration system; and 5) provisions concerning the optional use of certified service providers or certified automated systems for sales tax collection and remittance. In contrast, the following provisions will become effective on July 1, 2009: 1) the requirement that sales delivered or shipped to the customer be sourced to the delivery or shipping destination; 2) modifications to the single article limitation on local option sales taxes; 3) use of a single return covering multiple dealer locations; and 4) implementation of certain privilege taxes in lieu of sales tax.

Effective date: January 1, 2008 and July 1, 2009.
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Qualified Headquarters Facility Credit
Public Chapter 602, Section 3, applies the existing sales tax headquarters credit to projects involving an investment of $10,000,000 in a new, expanded, or remodeled building along with the creation of at least 100 new full-time headquarters staff employee jobs that pay at least 150% of Tennessee's average occupational wage.

Effective date: June 28, 2007.
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Major Cultural Attraction
Public Chapter 602, Sections 4-6, creates a sales tax credit equal to 6.5% of the amount spent on building materials, machinery, and equipment purchased as part of an investment of at least $100 million, along with the creation of at least fifty (50) jobs that pay at least 150% of Tennessee's average occupational wage, to support a major cultural attraction. A major cultural attraction is a historical site that has been in existence at least twenty-five (25) years that attracts at least 500,000 tourists per year.

Effective date: June 28, 2007.
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Electronic Filing
Public Chapter 602, Section 30, lowers the threshold for mandatory electronic filing of sales tax returns and electronic payment of the tax due. In 2002, it became mandatory to file sales and use tax returns electronically if a taxpayer was required to pay its sales and use tax in readily available funds. Electronic filing of these returns has reduced errors and lowered processing costs. Under this bill, the requirement to file sales and use tax returns electronically and pay in readily available funds applies to any taxpayer whose average monthly tax liability is $2,500 or more. The Commissioner has authority to waive these electronic payment and filing requirements in extenuating circumstances.

Effective date: Upon implementation by the Commissioner.
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Data Centers— Industrial Machinery and Electricity
Public Chapter 602, Sections 35-37, expands the industrial machinery exemption to include computer systems, computer networks, software, and related peripheral devices when such equipment is used in the operation of a qualified data center. A qualified data center is a newly constructed, expanded, or remodeled building or buildings that house high-tech computer systems and involve a required capital investment in excess of $250,000,000 during a 3-year period along with the creation of at least 25 net new full-time employee jobs that pay at least 150% of Tennessee's average occupational wage. The bill also applies a reduced sales tax rate of 1.5% on purchases of electricity by a qualified data center.

Effective date: June 28, 2007.
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Exemption for Vehicles Sold to Military Personnel
Public Chapter 602, Section 38, rewrites and expands the sales tax exemption applicable to motor vehicles purchased by members of the military. The exemption now applies to any active member of the United States Army, Navy, Air Force, Marines, or Coast Guard, or any member of the active guard and reserve program (AGR), who is stationed anywhere in Tennessee or anywhere on the Fort Campbell base. The exemption also applies to a member of the Tennessee national guard or a reservist who has been called to active duty and stationed in a combat zone, with such exemption beginning on the effective date of orders assigning the individual to the combat zone and ending 90 days after the effective date of orders releasing the individual from the combat zone. The exemption applies to motor vehicles that are registered in Tennessee.

Effective date: June 28, 2007.
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Energy for Residential Use
Public Chapter 602, Section 39, clarifies that energy fuels sold over the counter at the location of the seller in small portable tanks are not exempt from sales tax as fuel for residential use; however, propane sold in large cylinders with a capacity of one hundred (100) pounds or more sold for residential use remain exempt from sales tax.

Effective date: June 28, 2007.
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Motor Vehicle Manufacturer's Incentive Payments
Public Chapter 602, Section 40, removes motor vehicle manufacturer's incentive payments from the “sales price” of a motor vehicle for purposes of calculating sales tax. Such payments must be made pursuant to a program sponsored by a motor vehicle manufacturer under which an amount is received by the retailer from the manufacturer based upon the unit price of the vehicle and under which the retailer is required to reduce the price of the vehicle to the purchaser. Such payments do not include those made available by the manufacturer to the customer, sometimes referred to as "customer cash".

Effective date: Applies to assessments occurring on or after January 1, 2004.
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Video Programming Services
Public Chapter 602, Sections 41-47, defines the new term “video programming services” as programming comparable to programming provided by a television broadcast station, and specifically includes cable television, wireless cable television, and television provided through internet protocol technology. The term “video programming service” replaces the phrase “cable television service provider authorized pursuant to title 7, chapter 59, or by a provider of wireless cable television services” where that phrase appears in the code in order to apply tax in the same manner to television services that are provided using different forms of technology.

Effective date: June 28, 2007.
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Tennessee River Resort District
Public Chapter 602, Section 48, expands the Tennessee River Resort District Act to include Humphreys and Stewart counties. Counties originally eligible for Tennessee River resort district status, which have not yet made the election, are allowed to make the election for tax distribution purposes without making the election for purposes of liquor-by-the-drink, provided that eligible cities within the county have made the election. Eligible counties and municipalities must elect river resort status prior to July 1, 2008.

Effective date: June 28, 2007.
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Aircraft Brought to Tennessee as Part of a Headquarters Relocation
Public Chapter 602, Section 49, extends for two (2) years the exemption for aircraft brought into the state as part of a headquarters relocation. The exemption will now sunset in the year 2010 instead of the year 2008.

Effective date: June 28, 2007.
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Sales Tax Exemptions for Agricultural Products
Public Chapter 507 extends the exemption on farm products to include the sale of farm or nursery products directly from a farmer to a consumer via a nonprofit online farmers' market.

Effective date: July 1, 2007.
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Coal Mining Museum Sales Tax Reimbursement
Public Chapter 520 provides that, if a new museum dedicated to coal mining is constructed in a county containing a spallation neutron facility, then a distribution will be made to the entity responsible for the retirement of debt of the museum. The distribution would be in an amount equal to the sales taxes collected by the museum for food, admissions, parking, etc. Additionally, if a new hotel is built in connection with the construction of the museum and is located within a mile of the museum, then the entity for the retirement of the debt on the museum will receive an amount equal to the sales tax levied for lodging, parking, food, drink and other taxable items and services occurring at the hotel. The distributions will be given for thirty years, or until the debt on the museum is retired.

Effective date: July 1, 2007.
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Cigarette Tax Increase
Public Chapter 368 increases the tax on cigarettes from $.20 to $.62 per pack of 20 cigarettes ($.03.1 per cigarette). Proceeds resulting from the increase are earmarked for funding of education, agricultural enhancement, and trauma centers in Tennessee.

Effective date: July 1, 2007.
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Tire Pre-Disposal Fee
Public Chapter 602, Sections 23-27, increases the pre-disposal fee imposed on the sale of new tires from $1.00 to $1.35 per tire, which is the first increase since the fee was enacted in 1991. Proceeds from the tire pre-disposal fee are distributed to counties for the expense of recycling and disposing of used tires. The bill also imposes a 50% penalty on dealers who underreport sales that are subject to this fee.

Effective date: October 1, 2007.
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Litigation Tax—Criminal Injuries Compensation Fund
Public Chapter 234 increases the allocation of revenue from litigation tax to the criminal injuries compensation fund from 15.8471% to 24.0020% and reduces the allocation to the general fund from 40.3051% to 32.1502%.

Effective date: August 1, 2007.
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Litigation Tax—Fines and Fees—Alcohol Drug Addiction Treatment Fee
Public Chapter 311 authorizes courts to order persons sentenced to supervised probation to undergo alcohol and drug assessment, treatment or both. It requires the offender to pay for the assessment and treatment, unless the court determines the offender to be indigent. If the offender is indigent, some or all of the costs of treatment may be paid from the alcohol and drug addiction treatment fund. The public chapter assesses a $100 alcohol and drug addiction treatment fee on each drug-related conviction, with all proceeds going to the alcohol and drug treatment fund.

Effective date: July 1, 2007.
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Realty Transfer Tax
Public Chapter 180 amends the exemptions to the realty transfer tax. A transfer of real estate is exempt if the transfer is made by a transferor of real estate to a revocable living trust created by the same transferor or by a spouse of the transferor. Also exempt are transfers by the trustee of a revocable living trust back to the same transferor or to the transferor's spouse. Also exempt is a transfer of real estate by deed executed by the trustee of a revocable living trust to implement a testamentary devise by the trustor of the trust.

Effective date: July 1, 2007.
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Statute of Limitations on Refund Suits
Public Chapter 602, Sections 31-33, modifies the time period in which a taxpayer can file a lawsuit to challenge the denial of a refund claim. Under prior law, suit had to be filed within six months after the denial or deemed denial of the refund claim (the claim is deemed denied if the Department has taken no action on the claim within six months of the date filed). Following this change in the law, suit must be filed within one year after the date the refund claim is filed. The earliest point in which suit can be filed remains the date that the refund is denied or deemed denied.

Effective date: June 28, 2007.
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Attorneys' Fees
Public Chapter 602, Section 34, provides that attorneys' fees in tax litigation will be based on reasonable hourly rates multiplied by a reasonable number of hours expended in the case and will not be calculated using any premium, enhancement, or contingency.

Effective date: June 28, 2007.
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Regulations Regarding Quarterly Payments Authorized
Public Chapter 602, Section 179, amends Tenn. Code Ann. Section 67-4-2604 to add authority for the Commissioner of Revenue to promulgate regulations requiring non-participating tobacco manufacturers to make the required escrow payments in quarterly installments.

Effective date: June 28, 2007.
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Tennessee Biodiesel Manufacturers’ Incentive Fund
Public Chapter 580 defines biodiesel and creates the Tennessee Biodiesel Manufacturer's Incentive Fund. Disbursements from the fund are subject to the general appropriations act. In any year in which money is appropriated to the fund, the fund will make incentive payments to Tennessee biodiesel manufacturers who sell biodiesel to Tennessee distributors. The amount of the payments will be determined by the Department of Economic & Community Development. Up to ten million (10,000,000) gallons per year per manufacturer are eligible for incentive funds.

Effective date: July 1, 2007. Repeal date: July 1, 2013.
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Administrative Authority
Public Chapter 484 amends the definitions applicable to Title 55, Chapters 1 through 6, to recognize “commissioner” as meaning the Commissioner of Revenue and "department" to represent the Department of Revenue and makes numerous amendments to codify the shift of administrative authority from the Department of Safety to the Department of Revenue consistent with Executive Order 36 (2006).

Effective date: June 21, 2007.
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Application for Certificate of Title
Public Chapter 484, Section 13, provides that an application for certificate of title submitted by a licensed motor vehicle dealer can, in lieu of a signature, be accompanied by a power of attorney granting the motor vehicle dealer authority to sign the application on behalf of the owner.

Effective date: June 21, 2007.
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Certificates of Title for Vehicles Lacking Proper Documentation
Public Chapter 289 allows a person to apply for a certificate of title to a vehicle lacking proper documentation by submitting a certificate of ownership, plus any additional documentation required by the Department of Revenue, if the vehicle is at least thirty (30) years old.

Effective date: July 1, 2007.
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License Plates for Vehicles Lacking Proper Documentation
Public Chapter 484, Section 12, authorizes county clerks to issue a license plate upon accepting documentation of ownership of a vehicle with a fair market value of $3,000 or less.

Effective date: June 21, 2007.
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Assignment of Liens
Public Chapter 484, Section 25, permits the assignor in a multiple vehicle lien assignment to assign the lien to a person other than the owner, without affecting the interest of the owner. The assignee of a multiple vehicle lien assignment does not have to have a new title issued with the assignee's name on it in order for the assignee to maintain a perfected security interest. However, the assignor of a multiple vehicle lien assignment will remain liable to anyone without notice of the assignment until the assignee is named as the lien holder on the title. A multiple vehicle lien assignment occurs when fifty (50) or more liens are assigned in a single transaction or in a series of related transactions.

Effective date: June 21, 2007.
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Application for New Certificate of Title for Rebuilt Motor Vehicles
Public Chapter 484, Section 29, allows either the person rebuilding a motor vehicle or the person having it rebuilt to apply for a certificate of title. Previously, only the person doing the rebuilding could apply.

Effective date: June 21, 2007.
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United States Military License Plates
Public Chapter 484, Sections 55-56, provides that retired or honorably discharged members of the military are required to submit documentation of their status only upon initially applying for military license plates and not upon subsequent renewals.

Effective date: June 21, 2007.
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Number of Dealer Plates
Public Chapter 484, Sections 115-116, increases the limit on the number of dealer plates a dealer may have from one hundred twenty-five (125) to three hundred twenty-five (325).

Effective date: June 21, 2007.
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Honorary Consul
Public Chapter 17 creates a unique design for registration plates issued to honorary consulars, which bears the words "HONORARY CONSUL." The act further directs the revised plates to be issued to qualified persons upon renewal of registration of a vehicle.

Effective date: July 1, 2007.
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Trailers and Semitrailers
Public Chapter 142 allows the registration of any privately owned trailer or semi trailer that is not required to be registered but which the owner desires to be registered. The act also allows persons registering such trailers and semi trailers to obtain personalized plates. The act further directs that proceeds received from the sale of personalized trailer plates be expended for the development and maintenance of public horseback riding trails.

Effective date: July 1, 2007.
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Disability Placards
Public Chapter 112 removes the requirement that persons who are permanently disabled be required to submit certification prior to the department renewing a permanent placard.

Effective date: July 1, 2007.
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Trauma Nurses
Public Chapter 63 permits the issuance of a specialty license for trauma nurses under the category of "Emergency."

Effective date: April 30, 2007.
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Specialty Plates
Public Chapter 604 creates several new specialty license plates:
  • Recreational Vehicle
  • Alpha Omicron Pi Sorority
  • "Driving To A Cure" (Pink Ribbon)
  • For a Lifetime
  • Trout Unlimited
  • Friends of Natchez Trace Parkway
  • Nashville Predators
  • Civil War Preservation
  • Historic Franklin
  • 101st Airborne Division (Air Assault)
  • Diabetes Awareness
  • Sandhill Crane
  • Green McAdoo Cultural Center
  • NASCAR
This Public Chapter also creates cultural and military license plates:
  • Ohio State University
  • Women Veterans of America
This public chapter also makes technical changes to allow retired firefighters to be eligible for the special "firefighter" registration plate. The chapter amends the language of the University of Tennessee Lady Volunteers specialty plate section to include their most recent 2007 victory and directs the proceeds more specifically to the University of Tennessee-Knoxville Women's Athletic Department. The chapter further reclassifies the Holder of the Purple Heart plate as a memorial plate and provides that this license shall not be subject to the twenty-five dollar ($25) special fee.

The public chapter also extends the time period for the Support our Troops, Regional Medical Center at Memphis, and Sons of the American Revolution plates to meet all issuance requirements.

Effective date: July 1, 2007.
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Antique Motor Vehicles
Public Chapter 601 permits owners of antique motor vehicles to register an official license plate issued by the State of Tennessee from an era when the manufacture of the vehicle occurred instead of registering for new license plates.

Effective date: July 1, 2008.
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Special Environmental License Plate Funds
Public Chapter 153 requires that profits from the sale of environmentally themed special license plates to be allocated to the division of state parks. The funds shall be used solely for the planting and cultivation of trees, shrubs, plants, and flowers and for the maintenance thereof, and for making grants to universities in Tennessee for the development of new methods of treating pests that threaten trees and other vegetation. The chapter also allows for the local government, in lieu of providing matching funds for the plates, to provide tracts of land. The land must not have previously been used for park or recreational purposes, and must be dedicated entirely for park or recreational purposes. The value of the land must be independently appraised as being equal to or greater than the value of the required amount of the state grant.

Effective date: May 14, 2007.
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Power to Suspend, Revoke or Deny Application for a License
Public Chapter 484, Section 94, expands the grounds upon which the Motor Vehicle Commission may deny an application for a license or revoke or suspend the license of a motor vehicle dealer or salesperson, by including when the person possesses a certificate of title without the name of the transferee appearing on it, and by including when the person issues more temporary plates than allowed by law or fails to maintain a record of temporary plates issued.

Effective date: June 21, 2007.
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Motor Carriers - Unified Carrier Registration System
Public Chapter 484, Sections 97-105, authorizes the commissioner of revenue to participate in the unified carrier registration plan and agreement established in accordance with 49 U.S.C. 14504a. After the United States Department of Transportation establishes the unified carrier registration system, no foreign or domestic motor carrier, private carrier, leasing company, or freight forwarder shall operate on the highways of the state of Tennessee without registering with a base state under the unified carrier registration system.

Effective date: June 21, 2007.
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Motor Vehicle Records - Confidentiality
Public Chapter 484, Sections 110-114, updates Tennessee confidentiality statutes to reflect changes in the federal Drivers' Privacy Protection Act.

Effective date: June 21, 2007.
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Payoff of Motor Vehicle Trade-in
Public Chapter 278 requires motor vehicle dealers to pay off the agreed upon indebtedness on a trade-in vehicle within thirty (30) days after the dealer has received payment on the financing contract for the new motor vehicle purchase.

Effective date: July 1, 2007.
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Alcoholic Beverage Sales by Zoological Institutions
Public Chapter 150 revises the definition of “zoological institution” in Tenn. Code Ann. Section 57-4-102(38) for purposes of selling liquor-by-the-drink to include zoos on property leased by a county, opened to the public since at least 1997, accredited by the Association of Zoos and Aquariums, and located in a county with a population greater than 500,000. Public Chapter 150 further includes in the definition of “zoological institution” zoos operated on property owned by a city and open to the public since 1937, in counties having a population of not less than three hundred seven thousand eight hundred (307,800) nor more than three hundred seven thousand nine hundred (307,900), and zoos operated on property owned by a city and open to the public since 1948, in counties having a population of not less than three hundred eighty-two thousand (382,000) nor more than three hundred eighty-two thousand one hundred (382,100).

Effective date: May 14, 2007.
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Alcoholic Beverages Referendum
Public Chapter 52 provides that a municipality located partly in a county with a metropolitan form of government that has approved sales of alcoholic beverages for consumption on the premises and partly in a county that has not approved such sales shall hold a referendum on the legality of alcoholic beverages in the portion of the municipality located in the county that has not approved such sales. The referendum is binding on that portion of the municipality but has no effect on the legal status of alcohol in the portion of the municipality located in the county that has approved the sales of alcoholic beverages for consumption on the premises.

Effective date: April 24, 2007.
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Swiss Heritage Festival
Public Chapter 203 allows a special occasion license to be issued to a nonprofit historical society for the purposes of serving complimentary samples of homemade wine, manufactured in the Swiss tradition by at least one society member, during an annual festival that celebrates Swiss heritage, held at a farm museum in a county with a population of not less than fourteen thousand three hundred (14,300) nor more than fourteen thousand four hundred (14,400). The act further allows the transport of wine and other alcoholic beverages to the location of the special occasion for which the license was issued. The act further exempts such homemade wine from the restriction on the amount of wine a person may manufacture, in accordance with Tenn. Code Ann. Section 57-3-207(e).

Effective date: May 22, 2007.
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Alcoholic Beverage Sales by Recreational Clubs
Public Chapter 492 extends authority for selling wine and other alcoholic beverages to clubs in existence for 2 years prior to March 31, 2003 and located in a county having at least five hundred thousand (500,000) people. The club must have at least two hundred twenty-five (225) members paying dues; a policy of nondiscrimination relating to gender, race, religion or national origin; an eighteen (18) hole golf course; and a clubhouse of at least ten thousand square feet (10,000 sq. ft.) serving at least one meal a day, five days a week. The club may not compensate employees based on volume of alcoholic beverage sold and may not sell to persons under twenty-one (21) years of age.

Effective date: June 21, 2007.
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Sales of Wine by Wineries
Public Chapter 433 makes a technical correction by substituting “agricultural products” for “grapes”, relating to the percentage that must be contained in the wine produced by the licensed winery as a requirement for sales of wine unrestricted in the number of gallons sold. The chapter further permits wineries to sell gifts and tourism related items, as well as wine related items.

Effective date: June 18, 2007.
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Alcoholic Beverages in a Tourist Resort
Public Chapter 258 adds to those facilities authorized to sell alcoholic beverages for on-premises consumption as a premier type tourist resort one that is commercially-operated, has overnight accommodations, dining room, and historic grist mill located in DeKalb County and one that has a marina and restaurant and is located on a lake in DeKalb County within one great circle mile of Highway 56.

Effective date: May 24, 2007.
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Alcoholic Beverages Permitted by a Special Occasion License
Public Chapter 342 allows the issuance of special occasion license to certain 501(c)(3) organizations for selling wine in closed containers for consumption on or off premises; allows donation of wine to such organizations.

Effective date: June 5, 2007.
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