Metro Nashville Government Releases Report on Tax Incentive Funding

The Metro Government of Nashville & Davidson County on Tuesday released its Tax Increment Financing Study & Formulating Committee Report, which examines Metro’s Tax Incentive Funding (TIF) used to promote redevelopment in blighted areas. Mayor David Briley signed ordinance BL2018-1315 creating the committee to formulate recommendations on implementation of and ensure more transparency regarding the municipalities use of TIF. In its report, the committee compiled a number of observations and 17 recommendations, formally asking the Mayor’s Office to provide Metro Council with a description of agencies or departments that will address the recommendations, including cost estimates for implementation. The committee will present its recommendations to Metro Council on Monday, May 20 at 3 p.m. in council chambers at the Metro Courthouse.

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Some Gold Star Families See Tax Increase on Survivor Benefits

After the Tax Cut and Jobs Act of 2017, some Gold Star families saw taxes on their survivor benefits more than double, CNN reports. Under the law, children of deceased service members that were previously taxed at the parents’ rate now fall into a new tax bracket known as the “Kiddie Tax,” which has a rate of 37 percent. According to the Tragedy Assistance Program for Survivors, a nonprofit that assists the families of fallen soldiers, the bracket is to prevent wealthy families from hiding money in their children's names by taxing 'unearned income' and is intended as a trust and estate tax.

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Study Credits Tennessee Tax Policies for Economic Growth

A new study by the American Legislative Exchange Council, a conservative think tank comprised of legislators and business leaders, puts Tennessee in its top ten list of states with a positive economic outlook, the Chattanooga Times Free Press reports. Between 2007 and 2017, Tennessee’s GDP rose 43.1 percent, with the state growing payroll employment by 8 percent. The study credits Tennessee’s relatively low tax rates, lack of personal income tax and plans to phase out inheritance and unearned income taxes, among other reasons, for the state’s economic standing.

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IKEA in Memphis will Opt Out of PILOT Tax Breaks

Swedish furniture retailer IKEA will opt out of its 11-year payment-in-lieu-of-taxes (PILOT) break because the company failed to meet program requirements, the Daily Memphian reports. IKEA initially agreed to hire 175 employees with an average wage of $41, 011, however, currently employs 147 people with an average wage of $36,944. The company may get another year of incentives if it follows through on environmental projects such as water conservation efforts and installing a solar powered roof.

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U.S. Department of the Treasury Releases Updated Rules Regarding Opportunity Zones

The U.S. Department of the Treasury on Wednesday released its second set of proposed regulations regarding the Opportunity Zones tax incentive, The New York Times reports. Introduced in the 2017 Tax Cuts and Jobs Act, the initiative is intended to encourage development in economically distressed communities by allowing investors to defer, reduce or eliminate taxes on some capital gains when the investments are held for at least 10 years. Critics argue that the incentives, as introduced, would benefit real estate developers, not small businesses, and speed up the displacement of low-income residents in gentrifying areas. The new rules seek to quell some of these concerns, also allowing long-vacant properties to immediately qualify for the tax breaks and provides investors incentives even if the business focuses on exported goods or services to markets outside of the zone, pending the money is reinvested in another qualifying business or asset.

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Apply by June 1: Board of Governors to Fill Open Positions

Two open positions will be filled by the Tennessee Board of Governors at its meeting on June 15. In accordance with Article 47 of the TBA Bylaws, the board may fill the vacancies at its 2019 meeting. The West Grand Division Governor Position 1 seat represents Benton, Carroll, Chester, Crockett, Decatur, Dyer, Fayette, Gibson, Hardeman, Hardin, Haywood, Henderson, Henry, Lake, Lauderdale, Madison, McNairy, Obion, Shelby, Tipton and Weakley counties. The Fifth District Governor Position 1 seat is open because its current holder, Sherie Edwards, was elected to Vice President. The Fifth District represents Davidson County. If you would like to be considered for one of these positions, contact TBA Executive Director Joycelyn Stevenson in writing with your interest by June 1. Please include a resume with your submission.
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5 New Job Postings on TBA’s Joblink

See who is hiring in Tennessee. Recent job postings this month offer opportunities in litigation, real estate, health law and more. See full listings or post positions in your firm on TBA’s Joblink.
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Convention Hotel Deadline THIS FRIDAY

The cut off to reserve your hotel room at the discounted rate is 5 p.m. on Friday, May 17. 

The Tennessee Bar Association returns to Downtown Nashville's Renaissance Hotel for its Annual Convention June 12-15, with even better programming, exhibits and fun! Register NOW and receive:

  • Free Access to ALL 9 Hours of CLE, including the Bench Bar Program, co-sponsored by the Tennessee Judicial Conference
  • Opening welcome reception
  • Bench Bar Luncheon (featuring keynote speaker, Ken Starr)
  • Law School and General Breakfasts
  • Lawyers Luncheon (featuring special honor for Sen. Lamar Alexander)
  • Thursday night joint reception sponsored with TLAW and TABL
  • Thursday night Dinner/Dance Party featuring My So-Called Band
  • Friday night TBALL/YLD Party
  • Access to activities and programming designed for well-being including massages, contemplative space and more.
  • Access to TBA's sponsorship hall to meet with exhibitors, participate in our special TBA Wellness Corner and win prizes.
• QUESTIONS: Just email to get help.
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Volunteers Needed to Assist in Review of Legal Handbook for Tennessee Seniors

The TBA Elder Law Section is seeking assistance reviewing an updated edition of the 2019 Legal Handbook for Tennessee Seniors. This resource contains practical information on a wide range of topics, including issues such as applying for Social Security benefits, long-term care considerations and estate planning, as well as completely new sections addressing online security and new health care legislation. Volunteers will aid in reviewing the resource for errors prior to release. If you are able to assist with this important initiative, please email Elder Law Section Coordinator Jarod Word.

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Help4TNDay Kicks Off Saturday

Tennessee lawyers are invited to participate in Help4TNDay activities throughout the month of April. Events will bring attention to the ongoing need for free and low-cost legal services and highlight the groups that provide these services to disadvantaged Tennesseans. Opportunities include volunteering to help clients in need through Tennessee Free Legal Answers (TFLA) or at a local legal clinic. The events kick-off this Saturday with a statewide virtual legal clinic, where attorneys across the state will answer questions on TFLA from noon to 2 p.m. Simultaneously, the TBA will host an on-site TFLA Clinic and Luncheon in Nashville. To participate in the TBA event, contact Liz Todaro. Help4TNDay is a joint effort by the Tennessee Supreme Court Access to Justice Commission, the Administrative Office of the Courts, Tennessee Alliance for Legal Services and the Tennessee Bar Association. 
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Deadline for Veterans to Claim Special Tax Refund Approaches

The deadline for veterans to claim a tax refund ends this year, Clarksville Now reports. Passed in 2016, the Combat-Injured Veterans Tax Fairness Act seeks to provide refunds to qualified veterans who may have had taxes mistakenly withheld from their disability severance pay between 1991 and 2016. An initiative of the Legal Aid Society of Middle Tennessee & the Cumberlands, the Tennessee Taxpayer Project seeks to get the word out to all veterans who may qualify. By July 2019, eligible veterans must file an amended tax return for the year in which they received disability severance in order to receive a refund. Most people are eligible to receive between $1,750 and $3,200.

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Tennessee Gym Tax Repeal Passes Legislature

The Tennessee senate on Thursday passed Gov. Bill Lee’s proposal to repeal the state’s amusement tax on smaller-size gym memberships, the Times Free Press reports. Critics of the tax, including the National Federation of Independent Businesses, argue it is unfair and all businesses should be treated the same. The legislative fiscal note cites an estimated $2.5 million loss to local government and the Finance Committee estimated a $6 million loss of revenue.

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Bill Proposing State Historic Tax Credit Under Consideration

A bill that proposes adding a state historic tax credit in exchange for renovating qualified historic buildings is being considered in the Tennessee legislature, Johnson City Press reports. Tennessee is one of 15 states that do not offer a state historic tax credit. The bill proposes tiered economic incentives based on the location of the historical structure. Developers completing qualified rehabilitation work in Davidson and Williamson counties would be eligible to receive up to 10 percent in tax credits. Knox, Hamilton and Shelby counties can receive up to 20 percent, while counties in northeast Tennessee are eligible to receive up to 30 percent. For buildings to qualify for the credit, it must be listed on the National Register of Historic Places or located in a registered historic district and certified by the secretary of the Department of the Interior. Projects would be overseen by the Tennessee Historic Commission and have to meet the Department of Interior’s Standards for Rehabilitation.

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Registration Now Open for TBA Convention in Nashville, June 12-15

The TBA's annual Convention returns to downtown Nashville this summer! Mark your calendars for June 12-15 and prepare for four days of CLE, networking, entertainment and more at the Renaissance Hotel, 611 Commerce Street. Registration is officially open, with early bird rates available until April 30.
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Legislative Update - Pace Picks Up at General Assembly

Legislative activity continued to increase last week, with full committee calendars that included both bills and budget presentations of executive branch agencies. Additionally, some committees already have their projected end dates in sight as leadership continues to target an early May adjournment. The overall level of legislative activity will increase even more next week, as the bulk of legislation for 2019 will have its fate determined in the next four weeks. 
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Health Care Giant Receives $1.7 Billion Refund Despite Paying no Federal Tax in 2018

Health Care Service Corp. — the parent company for Blue Cross Blue Shield health plans in Illinois, Montana, New Mexico, Oklahoma and Texas — received a $1.7 billion tax refund despite paying no federal taxes in 2018, Axios reports. The company showed $4.1 billion profit on $35.9 billion of revenue in 2018 vs. $1.3 billion net profit on $32.6 billion of revenue in 2017, for which it paid about $467 million in federal taxes. The company credited the surplus to the repeal of the corporate alternative minimum tax as part of the Tax Cut and Jobs Act of 2017.

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New York Considers Tax on Second Homes

Lawmakers in New York are considering a singular solution to funding future NYC projects — a tax hike on multi-million-dollar second homes, The New York Times reports. The so-called “pied-à-terre tax” would institute an annual tariff on homes worth $5 million or more that do not serve as the buyer’s primary residence. The proposed hike would feature a sliding scale, with properties valued between $5 million and $6 million subject to a 0.5 percent surcharge on any valuation over $5 million, incrementally topping out at four percent for homes valued at over $25 million. Though unclear how much money the tax would raise, the New York City Comptroller's office estimated the tax would bring in a minimum of $650 million annually if enacted today and could raise $9 billion in state bonds based on expected revenue.

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U.S. Senate Democrats Support Increase, Changes to Child Tax Credits

U.S. Senate Democrats are rallying around a bill that intends to make strides in tackling child poverty, reports. Initially introduced in 2017, the American Family Act would expand the child tax credit to $3,000 per year for income-qualifying families with a child ages six to 16, and $3,600 per year for families with a child aged from zero to five. The benefits would be distributed monthly, in advance, to help the families with budgeting concerns.

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Bill Would Lower Local Governments' Sales Tax Fees

Knox County Commissioner John Schoonmaker continues his fight against an administrative fee he says is unnecessary and a strain on local governments, the Knoxville News Sentinel reports. The tax in question is a flat 1.125 percent fee to the state so that the Department of Revenue can process local option sales taxes and return them to the same counties and cities, for which the state collected $38 million in the 2017-18 fiscal year. New legislation promoted by Schoonmaker — HB1193/SB1126 — and sponsored by Rep. Justin Lafferty, R-Knoxville, and Sen. Richard Briggs, R-Knoxville, seeks to reduce the 1.125 percent fee to 0.5 percent, which advocates estimate will save municipalities millions. The bill was referred to the Senate Finance, Ways & Means Committee yesterday with a negative recommendation.

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Demand to Increase for Attorneys Practicing Elder Law

As the U.S. population continues to get older, more attorneys are entering the field of elder law or expanding their practices to provide elder law services, the ABA Journal reports. The U.S. Census Bureau projects that by 2035, for the first time in American history, there will be more adults age 65 and older than children. “As the American population grays, the need for attorneys who understand the unique aspects of planning for the elderly and people with special needs will grow,” says Michael J. Amoruso, president of the National Academy of Elder Law Attorneys. Medicare and Medicaid issues, long-term care planning, age discrimination disputes, veterans benefits, guardianship issues, inheritance disputes and elder abuse, among other categories, are areas that will need significant legal attention in the coming decades.
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TBA Officer Candidates Offer Messages to Members

All candidates with contested races in the 2019 Tennessee Bar Association election have been provided the opportunity of preparing a campaign message to members. Those messages were sent out yesterday by email to TBA members and are now also available on the website. Voting will begin Friday and continue through April 1. All members should receive emails with voting instructions on Friday.
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Next Thursday: Business Law Forum

Register now for the TBA Business Law Forum 2019.
This program will help business lawyers learn and refresh their knowledge about issues that may arise when drafting an LLC operating agreement. Topics will include an overview of the two extant Tennessee LLC acts and a comparison of those acts with the Delaware LLC Act; other distinctions of Tennessee law that impact the operating agreement; drafting key provisions, including distribution and allocation, employee and member compensation, and exit rights; and ethical considerations for lawyers drafting LLC operating agreements.
When: Thursday, May 9. Registration begins at 9 a.m.
Where: Tennessee Bar Center, 221 Fourth Ave. N., Nashville

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Court Seeking Comments on Proposed Rule 46A

The Tennessee Supreme Court is considering the adoption of Tennessee Supreme Court Rule 46A, which would govern the electronic service of papers that are e-filed, and it is seeking comments from the legal community and the public on the proposed rule. The deadline for submitting written comments is March 22. Comments should be e-mailed to or mailed to: James M. Hivner, Clerk, Tennessee Appellate Courts, 100 Supreme Court Building, 401 7th Avenue North, Nashville, TN 37219-1407.
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Gov. Lee Provides Avenue for Public Feedback on Legislation

Gov. Bill Lee has taken an additional step in his commitment to “an open and transparent government,” creating a webpage for the public to view and provide feedback on legislation that has been submitted to him for consideration. Lee maintains that involving Tennesseans into the process more directly will increase accountability in how laws are made. The site will be updated regularly, as bills pass the Legislature and land on his desk.

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TBA to Introduce Legal Document Generation

The TBA will soon launch a new subscription-based product for Tennessee lawyers — automated legal forms. The initiative will use HotDocs, a custom documentation generator that creates form templates and speeds up the preparation process based on client and case data. In order to provide this valuable resource to our members, we hope to obtain your comments and ideas on forms you deem beneficial for replication. With across-the-board participation, we can comprise a substantive, comprehensive database where subscribers will have access to forms submitted by all TBA sections. Please send suggestions and comments to TBA Membership Director Mindy Fulks.

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