January 15, 2013
Since the future of the poor City of Memphis seems to depend on future income from TDZs (Tourist Development Zones) and TIFs (Tax Incremental Financing) I decided to investigate these schemes further at the State level. I show below an email and response from Mr. Garrett Guillory, Tennessee Department of Revenue. There is his letter response, sales tax returns on TDZs and sales tax returns on Sports Authorities. Except for the Tennessee Titans stadium in Nashville, Memphis has far more of this type of financing than any other city in the state.
Dear Mr. Saino, Thank you for returning my call and providing clarification on your public records request, which the Tennessee Department of Revenue (the “Department”) received via email dated December 12, 2012. The Department seeks to provide public records in a timely manner. Per our telephone conversation from this morning, I am sending you this follow-up email with the questions I asked you during our conversation. So that the Department is able to more fully answer your request, please email me your response to the following: · As “Tax Incremental Financing” (“TIF”) plans are not statutorily defined in Title 67 of the Tennessee Code, please provide more specificity as to what information you are seeking regarding TIFS.
I would like a list of all Tennessee TIF’s that you are aware of that involve sales taxes being returned to the Tennessee TIF for payment of TIF bond interest and principle. I would like both Municipal Sports Authorities or Tourist Development Zones.
· In your request for information regarding TIFS, please clarify what is meant by “the amount of taxes paid each year on the TIFs.”
If sales taxes are used to finance the bonds, then the State of Tennessee would be responsible for accounting for the base sales tax and for returning the incremental sales taxes to the TIF zone.
· Please provide a date range for the tax information requested.
I would like at least the information for the last few years if not all since inception. Regards, Joe Saino
The answer was interesting and informative. I have attached the documents that Mr. Guillory furnished.
1) Two are spreadsheets showing the year by year distributions for qualified tourist development zones and Sports Authorities in Tennessee. Over the last ten years Memphis has received $112 million dollars from TDZs and $30 million for Sports Authorities. Note that Nashville is absent from the TDZ list.
2) In reading his letter you will note that he does not answer the question of the base amount of sales taxes from the TDZs as the open records law does not require him to go through the computer program to find this out. We can just hope that all of this payment is just incremental sales taxes over a base amount from the TDZ. I will investigate this further.
In his letter he also mentions Tennessee Code 7-88-101-116. I attached a critical part of that code, 7-88-106, which talks about the base sales tax and the increment. Also it says that Nashville can only have one TDZ but other counties can have more than one. We need to know the base amount and the increases and how the money has been used. More on this later.