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Retail Accountability FAQs

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1. Why do I owe money?

An analysis of our records shows that sales are less than purchases for the time period of the assessment.  We think you have collected sales tax but have not remitted this tax to the State of Tennessee.  We have estimated your sales and think you owe at least this amount.  You are also being charged a penalty for not reporting and paying the correct amount of tax at the time of filing.

2. How is the assessment calculated?

Please see the explanation at this link:  http://www.tn.gov/revenue/misc/rapassesscalculation.pdf.

3. Should I do something different in the future to avoid this?

Yes.  You received an assessment because you are not reporting all your sales and remitting the collected tax on your sales tax returns.  If you accurately report and remit all your sales on your sales tax return, you should not receive future assessments.

4. Does this close the period or can I still be selected for a full audit?

This assessment does not close the period so you could still be selected for full audit that might include this period or other periods.

5. Can I get credit for cigarette buydowns?

Yes.  You need to mail your buydown information from the cigarette manufacturer to the Retail Accountability Unit at the address listed below.  Please be sure to include in this correspondence a copy of your Notice of Assessment so that the buydown credit will be applied to the correct assessment.  In order to receive credit toward your assessment, the buydown information from the cigarette manufacturer must include:

  1. The name of the cigarette manufacturer providing the buydown
  2. The name of the business receiving the buydown
  3. The buydown period which is usually the date (month and year) that the cigarettes were purchased but is not the date the buydown was paid
  4. The amount of the buydown credit

Without all of this information, a buydown credit will not be granted.

Mail buydown information and a copy of the Notice of Assessment to:

Tennessee Department of Revenue
Attn:  Retail Accountability
PO Box 190644
Nashville, TN 37219-0644

6. What can I submit as documentation/proof of cigarette buydowns?

The documentation you submit for cigarette buydowns must be from the cigarette manufacturer. We will not accept any documentation that has been altered or can be altered, i.e. spreadsheets in any format, word processing files and text files. Screenshots of cigarette manufacturer websites are acceptable if the screenshot displays the name of the cigarette manufacturer, the name of your business, the buydown period, the amount of the buydown credit and is not a screenshot of a spreadsheet that can be altered.

If the only documentation that you can get is in an unacceptable format, you will be required to submit additional documentation. This additional documentation could be a signed statement from your tobacco representative that details the amounts on the documentation by month or quarter, or bank statements showing the amounts of direct deposits to your bank account by the tobacco manufacturer. However, bank statements alone will not be accepted in lieu of the manufacturer documentation described above because the bank statements do not include the buydown period.

7. How do I know if I participate in a buydown program?

If you are unsure, you probably do not participate in a buydown program with a cigarette manufacturer.  You would have a contract or agreement with a cigarette manufacturer if you were a participant.  If you are still unsure, you should contact your cigarette manufacturer’s representative to verify.

8. How does the Tennessee Department of Revenue know what I purchased?

As of April 4, 2012, wholesalers selling beer and tobacco products are required to report retailers’ purchases to the Tennessee Department of Revenue per Public Chapter 657.

9. My Notice of Assessment says that I can access on the internet the wholesaler data used to make this assessment, but I am having difficulty.  How can I get the data?

In your internet browser, carefully enter the link provided in the Notice of Assessment exactly as it appears or copy and paste the following link and add your Sales and Use Tax account number to the end of the link below:

https://revenue.webapps.tn.gov/retailerportal/account/register.aspx?loginid=

The first time you access your account you will be asked twice to enter a password.  If you need to access this site in the future, you will use the same password.

10. What is my username so that I can go to the internet and download the wholesaler data or recover my password?

Your username is your Sales & Use tax account number.

11. What if the wholesaler data is incorrect?

You must contact the wholesaler that provided the incorrect data and notify them of the error.  The wholesaler will then need to upload a corrected file.  Once the corrected data has been uploaded, you or the wholesaler should notify us of the correction so that your assessment can be adjusted.

12. I am building up the inventory at my store.  Shouldn’t the assessment be reduced due to this inventory buildup?

If this is a new store with little or no beginning inventory and the assessment is for the first quarter the store was open, it is possible that the assessment may need to be adjusted if adequate records are submitted.  Please contact Retail Accountability to discuss the inventory records to provide.

13. I have monthly or quarterly inventories that can prove I have more product at the end of the quarter than I had at the beginning of the quarter.  Will this change the assessment?

It is unlikely unless this store is new.  We are aware that you do not sell everything you purchased during the quarter.  However, we also know that you had inventory from the previous quarter that was sold during the assessed quarter.

14. I will amend my monthly Sales & Use tax returns to move figures from food sales (5% state tax rate) to fully taxable sales (7% state tax rate).  Will this reduce or eliminate my assessment?

You are legally required to accurately report all types of sales on your monthly Sales & Use tax return.  It would be fraudulent to simply reduce food sales and change those reported sales to fully taxable sales in order to avoid the Retail Accountability assessment.  It is a class E felony to file a fraudulent tax return or evade tax owed to the State of Tennessee.

15. What if I change my business structure and the Tennessee Department of Revenue sent me a new Sales and Use Tax certificate?

The Tennessee Department of Revenue Blanket Certificate of Resale clearly states that "The purchaser must notify the seller in writing if the certificate is no longer valid." Therefore, you must contact all your wholesalers in writing and notify them that your Blanket Certificate of Resale is no longer valid. Then you will need to present the new Sales and Use Tax certificate to the wholesaler(s).

16. What should I do if I sell my business?

The Tennessee Department of Revenue Blanket Certificate of Resale, clearly states that "The purchaser must notify the seller in writing if the certificate is no longer valid." Therefore, you must contact all your wholesalers in writing to notify them that your Blanket Certificate of Resale is no longer valid. Your Blanket Certificate of Resale is no longer valid on the last day your business is open. You will also need to complete the questions on the back of your Certificate of Registration and return the certificate to the Tennessee Department of Revenue. You may contact Taxpayer Services at (615) 253-0600 for assistance in closing your business.

17. I sold my store but I still received an assessment.  How do I get the assessment resolved?

Wholesalers are still reporting sales to your closed business.  Please download the data and notify in writing, any wholesaler still reporting sales to your business that your business is closed.  Once the wholesalers have corrected the data they upload, please notify us so that we can use the corrected data to adjust your assessment. If the wholesalers do not change the data because you did not notify them in a timely manner that you had closed your business, you could still be liable for the Retail Accountability assessment.

18. I sold cigarettes to other retailers and those sales are not reported on Line 7 of the monthly Sales & Use tax return.  How do I get credit for those sales to reduce my assessment?

You cannot make sales for resale without a tobacco license.  Therefore, you must pay the sales tax on those sales.  Please see Important Notice 13-10 which is located on our website at http://www.tn.gov/revenue/notices/index.shtml in the Tobacco Tax tab.

19. What if I transfer product between multiple locations that I own?

Purchases should be made by location. Your wholesaler should have each of your locations as a separate account with its own Sales Tax number. Your purchases must be identified by selling location even if the product is delivered to a central location before being transferred to the selling location. This will ensure the correct purchases are reported to the correct Sales Tax number.

20. Can I have my Accountant or Bookkeeper contact you about this assessment?

We can only discuss your tax information with the owner or authorized employee of your business unless you send us a completed Power of Attorney (POA).  A Power of Attorney form can be found on our website or at the following link. http://tn.gov/revenue/forms/general/f0103801Fill-inR.pdf    We will need to have a completed Power of Attorney on file before we can discuss your tax information with your representative.  Contact us at (855) 286-7423 as to how and where the completed Power of Attorney form can be submitted.

21. What if I do not agree with the assessment?

See the Frequently Asked Question “What if the wholesaler data is incorrect?”

See the Frequently Asked Question “Can I get credit for cigarette buydowns?”

If you still have additional issues or information, please contact Retail Accountability by email at resale.data@tn.gov or telephone at (615) 741-9300 or (855) 286-7423.  You must tell us why you think this assessment is incorrect.  You will be asked to provide sales documentation and/or purchase records similar to an audit.  During this process, we may determine you owe more than the assessment or refer your account to our field audit unit for a full audit.

You may also request an informal conference to discuss this assessment.  If you request an informal conference within thirty days from the date of the Notice of Assessment, the conference will be granted.

If you wish to contest this assessment without making payment, you have 90 days to file suit in chancery court, either in Davidson County, Tennessee, or the Tennessee county of your domicile or principal place of business.

22. What if I can’t pay this much right now or need to pay in installments?

After you have worked with the Retail Accountability Unit and have no further information that might reduce your assessment, the Tax Enforcement Unit can evaluate your account to see if you qualify for a payment plan.  If a Tax Enforcement officer has contacted you about payment of the assessment, notify them that you are interested in a payment plan.  If an officer has not sent you a letter, please call Tax Enforcement at (615) 253-0022 for additional information.

23. What if I make a payment now, then later I discover an error or locate additional buydowns?

If you submit additional documentation that would allow for an adjustment to the assessment, and this creates an overpayment credit, you will be able to take the credit on your next Sales and Use Tax return.

24. Should I amend my Sales Tax Returns?

Possibly.  However, you must pay this assessment even if you amend returns.  If this assessment is not paid in full, it will be turned over for collection by our Tax Enforcement Unit.  If this assessment plus the tax reported on your original sales tax returns for the quarter does not represent all the sales tax you collected during that quarter, you need to amend the returns for the quarter.  See example below.

If you amend any sales tax returns and you think this should lower your assessment, contact Retail Accountability and provide the amended information.  The assessment will not be automatically adjusted due to amended returns.  You must contact the Retail Accountability Unit once you have filed and paid the amended returns.

Month
Sales Tax Collected
Sales Tax Reported
October
$7,500.00
$2,000.00
November
$8,200.00
$2,100.00
December
$9,750.00
$2,450.00
Total:
$25,450.00
$6,550.00

Sales Tax Collected for the Quarter:
$25,450.00
Sales Tax Paid on Sales and Use Tax Returns:
$6,550.00
Underreported tax:
$18,900.00
Retail Accountability Tax Assessment:
-$14,000.00*
Additional tax due on Amended Returns:
$4,900.00

The October, November and December monthly Sales Tax Returns will need to be amended to report the $4,900.00 of additonal tax collected and not remitted to the Department of Revenue. Your books and records should indicate which month the tax was underreported and the necessary months should be amended. 

* Penalty and interest from the Retail Accountability Assessment cannot be deducted from tax due.

Please note:  Amended Sales & Use Tax returns will not cause the Retail Accountability assessment to be recalculated or the penalty to be removed from the assessment.  Tax paid on amended returns filed after the Retail Accountability assessment is issued will be considered a payment toward the Retail Accountability assessment.

25. What if I have read all of these questions and I still need help?

Please check our website for other reference materials that may answer your questions.  You can email additional questions to Resale.Data@tn.gov or call (615) 741-9300 within Nashville or (855) 286-7423 outside Nashville.