Tennessee Department of Revenue to Distribute $200 Million in Federal Coronavirus-Relief Funds: Does Your Business Qualify?

SALT Alert: Tennessee Edition

Firm Alert

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On June 2, 2020, Tennessee Gov. Bill Lee directed the Tennessee Department of Revenue to distribute $200 million in federal coronavirus relief funds to businesses impacted by mandatory closures under the “Tennessee Business Relief Program.” Although the department has not yet released the details of the program, it has published some frequently asked questions that shed light on the businesses that may be eligible for the payments and how the payments will be made.

Who is eligible?

The following types of businesses appear to be eligible regardless of any specific financial impact:

  • Barber shops
  • Beauty shops
  • Nail salons
  • Tattoo parlors, spas, and other personal care services
  • Gyms and fitness centers
  • Restaurants
  • Bars
  • Hotels and other travel accommodations
  • Theaters, auditoriums, performing arts centers, and similar facilities    
  • Museums, zoos, and other similar attractions
  • Amusement parks
  • Bowling centers and arcades
  • Marinas
  • Amusement, sports, and recreational industries
  • Promoters of performing arts, sports, and similar events
  • Agents and managers of artists, athletes, and entertainers
  • Independent artists, writers, and performers

Additionally, the following businesses are eligible if their sales were reduced by at least 25%, as shown on their April sales tax returns:

  • Furniture stores
  • Home furnishing stores
  • Clothing stores
  • Shoe stores
  • Jewelry, luggage, and leather goods stores
  • Sporting goods, hobby, and musical instrument stores
  • Book stores
  • Department stores
  • Office supply, stationery and gift stores
  • Used merchandise stores
  • Other miscellaneous stores

The department stated that more than 28,000 Tennessee businesses are expected to qualify for a payment under the program.

How will this program benefit smaller businesses?

Gov. Lee stated when announcing the program that “[t]he COVID-19 pandemic has created immense economic pain across our state and especially among small businesses that faced temporary closure. As we responsibly steward our federal stimulus money we have worked to quickly prioritize our small businesses.” It is expected that more that 73% of the businesses that will qualify for the funds have annual gross earnings of $500,000 or less.

How will the payments be calculated?

The department stated that the payments will be calculated based on the annual gross sales of the business, presumably as derived from business tax and/or sales tax filings.

How will the payments be made?

Payments will be made through direct deposit or check. The department is encouraging eligible businesses to update their mailing addresses in TNTAP.

If you have any questions about the Tennessee Business Relief Program, please contact one of the attorneys in the State and Local Tax Practice Group at Bradley.