Follow-up on the importance of a SITUS report from Brad Harris, Finance Consultant after discussion at a joint consultant meeting:
Many of you were in Cookeville yesterday and today, and heard Mike Tallent talk about the importance of cities checking SITUS reports. This importance cannot be understated. For a number of reasons. (Spoiler: go to end for link to set up getting SITUS reports online). Businesses often are not getting “placed” in the correct SITUS code. A SITUS code is a unique 4-digit code… unique to every city and county in TN.
When a business opens, it has to apply for a business license (locally, I know) and sales tax number. In the application process they must tell the state where they are located. If a person opens a restaurant in Cookeville, they may tell the state they are located in Putnam County, or Algood, or wherever their home office or residence is located. If so, the city will most likely not get the money due to them. Also, I am told that the state is also using GIS to determine where businesses are located. One city told me that they have a Big Lots store right in the middle of town, but GIS said otherwise, and they were not receiving the sales and business tax revenue. Another city told me that their sales tax revenue dipped $100,000 per month, and when they looked into it, GIS had a COSTCO located either in the county but probably the neighboring city.
Another reason is that businesses that are ‘chains’ and have many convenience stores everywhere (for example) sometimes will put their home office on their application. Bad for the city or county where the business is actually located… you get the idea.
For many years, a local government could call the TN Dept. of Revenue and ask for a SITUS report. They could ask for, and receive their own, as well as surrounding cities and the county. It was great because you could then see where a business’ taxes were going. It was pretty simple to see because if they were not on your list, they would be shown in the county SITUS list, or some other city. THEN… the state attorney general opined that these reports could not be given out (Legal team… pardon my limited knowledge here). So it became near impossible to get any report. THEN… the state legislature passed a law to (I think) make it easier for local governments to get the information they needed to determine if they were getting the revenue they were entitled to. That helped. NOW…
Local governments can register online to get reports themselves. There are limits that I don’t fully understand, but I think it is limited to your SITUS. They need a user name and password, and here is the link: https://tntap.tn.gov/REP/_/#3
Also, there is a number on the page for local governments to sign up- 615-532-8944. Keep in mind that this is confidential information for users. So… it is pretty easy now to get decent SITUS reports. This needs to be done a couple of times per year. You can only go back one year to recoup money you did not receive. This can be done for sales tax and business tax. NO ONE is going to call a city or county and say “I’ve got $300,000 of your money… would you like it?” Local governments MUST take the initiative to do this. They have to know when a new business comes to town, and they need to go on to the reports and find the new business. If it is not there they need to contact the TN Department of Revenue.
Mike Tallent was correct. And we all need to be prudent in making sure our cities are doing this. There are always others looking to take money away from cites, so we need to help them keep, or find the revenue they are rightfully entitled to.
Many of you were in Cookeville yesterday and today, and heard Mike Tallent talk about the importance of cities checking SITUS reports. This importance cannot be understated. For a number of reasons. (Spoiler: go to end for link to set up getting SITUS reports online). Businesses often are not getting “placed” in the correct SITUS code. A SITUS code is a unique 4-digit code… unique to every city and county in TN.
When a business opens, it has to apply for a business license (locally, I know) and sales tax number. In the application process they must tell the state where they are located. If a person opens a restaurant in Cookeville, they may tell the state they are located in Putnam County, or Algood, or wherever their home office or residence is located. If so, the city will most likely not get the money due to them. Also, I am told that the state is also using GIS to determine where businesses are located. One city told me that they have a Big Lots store right in the middle of town, but GIS said otherwise, and they were not receiving the sales and business tax revenue. Another city told me that their sales tax revenue dipped $100,000 per month, and when they looked into it, GIS had a COSTCO located either in the county but probably the neighboring city.
Another reason is that businesses that are ‘chains’ and have many convenience stores everywhere (for example) sometimes will put their home office on their application. Bad for the city or county where the business is actually located… you get the idea.
For many years, a local government could call the TN Dept. of Revenue and ask for a SITUS report. They could ask for, and receive their own, as well as surrounding cities and the county. It was great because you could then see where a business’ taxes were going. It was pretty simple to see because if they were not on your list, they would be shown in the county SITUS list, or some other city. THEN… the state attorney general opined that these reports could not be given out (Legal team… pardon my limited knowledge here). So it became near impossible to get any report. THEN… the state legislature passed a law to (I think) make it easier for local governments to get the information they needed to determine if they were getting the revenue they were entitled to. That helped. NOW…
Local governments can register online to get reports themselves. There are limits that I don’t fully understand, but I think it is limited to your SITUS. They need a user name and password, and here is the link: https://tntap.tn.gov/REP/_/#3
Also, there is a number on the page for local governments to sign up- 615-532-8944. Keep in mind that this is confidential information for users. So… it is pretty easy now to get decent SITUS reports. This needs to be done a couple of times per year. You can only go back one year to recoup money you did not receive. This can be done for sales tax and business tax. NO ONE is going to call a city or county and say “I’ve got $300,000 of your money… would you like it?” Local governments MUST take the initiative to do this. They have to know when a new business comes to town, and they need to go on to the reports and find the new business. If it is not there they need to contact the TN Department of Revenue.
Mike Tallent was correct. And we all need to be prudent in making sure our cities are doing this. There are always others looking to take money away from cites, so we need to help them keep, or find the revenue they are rightfully entitled to.
Date Added
Mar 14, 2019