Amends TCA Title 58; Title 62; Title 67 and Title 68.

This bill establishes obligations and protections for certain out-of-state businesses and employees who are in this state responding to a disaster or emergency, as discussed below. This bill defines "responding out-of-state business" as a business entity that, except for disaster or emergency related work, has no presence in this state, conducts no business in this state, and whose services are requested by a registered business or by a state or local government for purposes of performing disaster or emergency related work in the state; and includes a business entity that is affiliated with a registered business solely through common ownership. This bill defines "responding out-of-state employee" as an employee of a responding out-of-state business or registered business who does not work in the state, except for disaster or emergency related work. This bill defines "registered business" as a critical infrastructure business entity that is currently registered to do business in this state.<br /> <br /> Under this bill, responding out-of-state businesses and responding out-of-state employees must pay the following transaction taxes and fees, when the tax or fee is determined, collected, remitted, and reported by others duly registered and required to collect such taxes and fees:<br /> <br /> (1) Fuel excise taxes imposed by the Petroleum Products and Alternative Fuels Tax Law;<br /> (2) State and local sales and use taxes imposed by the Retailers' Sales Tax Act;<br /> (3) Local hotel occupancy taxes;<br /> (4) Taxes imposed on the purchase or consumption of intoxicating liquors, beer, and other alcoholic beverages; and<br /> (5) Any other transaction tax or fee assessed, collected, or imposed on specific transactions or activities in the usual course of business without imposing any obligation on a responding out-of-state business or responding out-of-state employee to register, file a return, or otherwise self-report and remit the tax or fee due.<br /> <br /> This bill specifies that the above provisions do not limit or otherwise alter or amend the power of a court to exercise personal or in rem jurisdiction over responding out-of-state businesses, responding out-of-state employees, or their property, but that jurisdiction may not be used as a basis to impose a tax, fee, or other obligation contrary to the protections provided by this bill. This bill further provides that it does not confer any immunity from any criminal prosecution in any court of this state.<br /> <br /> Under this bill:<br /> <br /> (1) A responding out-of-state employee:<br /> (A) Does not establish residency or a presence in the state that would require that person or that person's employer to administer, file, or pay taxes or fees or to be subjected to pay any other state or local tax or fee, except as expressly provided for in this bill; and<br /> (B) When holding a license, certificate, or other permit issued by the state of the employee's permanent residence or any other state evidencing the meeting of qualifications for professional, mechanical, or other skills, is deemed licensed, certified, or permitted by the state to render disaster or emergency related work involving such skill and is not required to register, report, or pay any tax or fee related to such licensure, certification, or permitting in this state; and<br /> (2) A responding out-of-state business does not establish a level of presence that would require that business to register, file, or remit state or local taxes or that would subject that business to any state licensing or registration requirements.<br /> <br /> This bill specifies that except as it otherwise provides, the above-described protections should be interpreted broadly to relieve a responding out-of-state business and a responding out-of-state employee from any obligation to provide documentation, registration, tax, fee, or other submission or filing with the state or its political subdivisions, including, but not limited to, the following:<br /> <br /> (1) Unemployment insurance;<br /> (2) State and local occupational licensing fees;<br /> (3) Registration for state and local sales and use tax, or any requirement to collect tax, file returns, or otherwise self-report or remit any sales or use tax to the state as a result of or in relation to any disaster or emergency related work;<br /> (4) State and local ad valorem tax on tangible personal property brought into the state temporarily for use in disaster or emergency related work and subsequently removed from the state, such property being deemed not to have acquired a situs in the state. However, any tangible personal property sold, transferred, or leased to a person other than a responding out-of-state business or responding out-of-state employee will be deemed to acquire situs in this state on the date of such sale, transfer, or lease and thereafter will be subject to use tax, ad valorem tax, and any other tax imposed directly or indirectly on such property;<br /> (5) Any registration or regulation of businesses or public utilities by the secretary of state, public utilities commission, or any other agency or instrumentality of the state; and<br /> (6) The Excise Tax Law of 1999; the Franchise Tax Law of 1999; the Business Tax Law; and any other state or local tax on or measured by, in whole or in part, net or gross income or receipts, so that all disaster or emergency related work of the responding out-of-state business that is conducted in this state will be disregarded with respect to any filing requirements for such tax including the filing required for a unitary or combined group of which the responding out-of-state business may be a part. Also, for the purpose of apportioning income, revenue, or receipts the disaster, or emergency related work performed by a responding out-of-state business in this state will not be considered sourced to this state and will not otherwise impact or increase the amount of income, revenue, or receipts apportioned to this state.<br /> <br /> This bill provides that in the event a responding out-of-state business or a responding out-of-state employee either remains in the state after the completion of emergency or disaster related work or otherwise ceases to qualify as a responding out-of-state business or responding out-of-state employee, such business or individual loses the protections of this bill effective as of the first date on which the business or individual no longer qualifies as a responding out-of-state business or responding out-of-state employee.<br /> <br /> ON MARCH 18, 2019, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 624, AS AMENDED.<br /> <br /> AMENDMENT #1 specifies that, in addition to property and equipment owned or used by various communications and utility services providers, "critical infrastructure" also includes property and equipment used for such providers.<br /> <br /> This bill specified that state and local ad valorem tax on tangible personal property brought into the state temporarily for use in disaster or emergency related work and subsequently removed from the state, such property being deemed not to have acquired a situs in the state; provided, however, that any tangible personal property sold, transferred, or leased to a person other than a responding out-of-state business or responding out-of-state employee is deemed to acquire situs in this state on the date of such sale, transfer, or lease and thereafter shall be subject to use tax, ad valorem tax, and any other tax imposed directly or indirectly on such property. This amendment instead specifies that tangible personal property of a responding out-of-state business, upon being installed or affixed to real property within this state, sold or transferred to in-state persons, or otherwise coming to rest and acquiring a location within this state, is subject to use tax, ad valorem tax, and any other tax imposed directly or indirectly on such property.<br /> <br /> This amendment limits the period within which a responding out-of-state business does not establish a level of presence that would require the business to register, file, or remit state or local taxes or that would subject that business to any state licensing or registration requirements. Under this amendment, the period within which a presence will not be established is referred to as a "disaster response period", which this amendment defines to mean the period that begins 10 days before the date of the earliest event establishing a disaster or emergency and that ends 120 days thereafter, or such later date as may be set by the governor or president of the United States.<br /> <br /> This bill provided that, for the purpose of apportioning income, revenue, or receipts the disaster, or emergency related work performed by a responding out-of-state business in this state is not sourced to this state and does not otherwise impact or increase the amount of income, revenue, or receipts apportioned to this state. This amendment instead provides that, if an affiliate of a responding out-of-state business is required to file a combined or consolidated return, the responding out-of-state business's income, revenue, or receipts from disaster or emergency related work in this state must not be sourced to this state and must not otherwise impact or increase the amount of income, revenue, or receipts apportioned to this state.<br /> <br /> Under this bill, a responding out-of-state business or employee who remains in the state after the completion of emergency or disaster related work or otherwise ceases to qualify as a responding out-of-state business or responding out-of-state employee, would lose the protections of bill effective as of the first date on which the business or individual no longer qualifies as a responding out-of-state business or responding out-of-state employee. This amendment changes this provision. Under this amendment, A responding out-of-state business or employee who remains in this state after the disaster response period loses the protections of this bill and the computation of such person's franchise and excise tax and business tax liability must include in the tax base net or gross income or receipts from activities transacted during the disaster response period.<br /> <br /> This amendment also makes numerous nonsubstantive changes to the form and style of the text of this bill.<br /> <br /> ON APRIL 30, 2019, THE HOUSE SUBSTITUTED SENATE BILL 624 FOR HOUSE BILL 551, ADOPTED AMENDMENT #1, AND PASSED SENATE BILL 624, AS AMENDED.<br /> <br /> AMENDMENT #1 adds to this bill's definition of "critical infrastructure" any real and personal property and equipment that is owned for or used by or for "fuel supply systems, including such systems for gasoline, diesel, biodiesel, heating fuel, jet fuel, and propane."<br /> <br />