Tennessee Department of Revenue Provides Additional Details on the $200 Million Tennessee Business Relief Program

SALT Alert: Tennessee Edition

Firm Alert

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The Tennessee Department of Revenue has published additional frequently asked questions regarding the Tennessee Business Relief Program under which $200 million in federal coronavirus relief funds will be distributed to businesses impacted by mandatory closures. Among other information, the new guidance includes further details on what businesses may receive payments and how and when the payments will be made.

What businesses are eligible?

In a prior article, we reviewed the department’s initial description of the program, which included a list of the types of businesses eligible for a payment. The department now describes that, in addition to falling within this list, a business must have annual gross sales of $10 million or less across all locations to be eligible for a payment. The department will use the greater of the business’ gross sales reported on its 2019 sales tax return or the gross receipts reported on its most recent business tax return for determining whether this threshold is exceeded.

When will the payments be made?

The department has started notifying eligible businesses by either email or direct mail. Once notified, businesses will be prompted to complete pre-award certification forms to verify their eligibility criteria and agree to the program’s payment guidelines. Once the certification form has been completed and a business’ eligibility is confirmed, the department will issue a payment. The payments will be made by direct deposit if the business has previously provided bank account information and authorized the department to save the information. Otherwise, payments will be made by check. 

How much are the payments?  

Annual Gross Sales

Payment Amount

$1 - $100,000

$2,500

$100,001 - $500,000

$5,000

$500,001 - $1,000,000

$10,000

$1,000,001 - $5,000,000

$20,000

$5,000,001 - $10,000,000

$30,000

Are there restrictions on using the payments?

The funds received must be used to combat the financial effects resulting from COVID-19, which does not include any tax liability that the business may have. Businesses must keep records regarding how the funds are spent. Businesses accepting the funds must agree to a potential audit by the state concerning the qualification for and use of the funds. If payment requirements are not met, the funds may be recaptured by the state.

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.