HB 799 Summary

• Authorizes alternative methods for apportioning corporate and financial institution income for state income tax purposes, with the burden of proof on the party requesting or requiring the alternative method to show standard methods do not fairly represent business activity.

• Prohibits the Commissioner of Revenue from requiring combined tax returns for affiliated corporations until regulations are enacted specifying criteria for proving improper income shifting; prohibits penalties on combined return deficiencies unless the taxpayer's method lacked reasonable basis or intercompany transactions lacked material non-tax business purpose.

• Reduces monthly interest rates on tax deficiencies and delinquencies from 1% to 1/2% per month (phased in from 2015-2019) and makes interest and penalty assessments discretionary rather than mandatory under income, franchise, and sales tax laws.

• Establishes a presumption that sellers collected sales taxes from customers but prohibits penalties for failure to remit collected taxes unless the commissioner proves by preponderance of evidence the taxpayer actually collected funds and knowingly refused to remit them.

• Expands Board of Tax Appeals jurisdiction; eliminates bond requirements for appeals; provides that if the Board of Review or Board of Tax Appeals fails to issue an order within 6-9 months respectively, the taxpayer may treat this as a denial and appeal further; and requires de novo review in chancery court with no deference to administrative decisions.