The Senate Tax Subcommittee has approved legislation sponsored by Senators Jim Tracy (R-Shelbyville) and Jack Johnson (R-Franklin) that gives Tennessee small businesses a “Business Tax Holiday.” Senate Bill 1293 would provide a refund for the total amount of state and local sales tax paid by small business owners to retailers for purchases made in conjunction with their operations during any one continuous 24-hour period between January 1, 2014, and June 30, 2014.
“This legislation is similar to the annual Sales Tax Holiday that is enjoyed by consumers in August on back-to-school items and clothing,” said Senator Tracy. “It simply gives much needed tax relief to our small businesses.”
To receive a refund under this bill, a Tennessee small business must file a single application with the Department of Revenue by August 31, 2014. The total amount of the refund may not exceed $5,000. No purchases made using cash would be eligible for refund.
The bill applies to small businesses located in the state with total annual gross receipts of no more than $2 million averaged over a three-year period and that employs no more than 10 persons on a full-time basis. Those businesses under three years old may receive the refund if they have total gross receipts of no more than $2 million in the year immediately preceding application. If a business has been in operation for less than one year, such business must have projected total gross receipts of no more than $2 million for the year in which the application is made.
“Many small businesses have suffered over the past several years. This legislation is a means to help them, while providing an economic incentive for them to invest in their business and the economic growth of our communities,” Tracy concluded.