A number of years ago our firm was instrumental in obtaining legislation to permit tangible personal property taxpayers to file amended tangible personal property tax returns with the Assessor of Property. Prior to passage of that legislation, if the taxpayer made any errors such as overstating any assets or any simple mathematical errors, there was no way for the taxpayers to have such errors corrected and receive refunds of the overpaid taxes. Once paid, the taxes were gone forever.

Due to the change in the amended return law, taxpayers that have filed timely returns now have until September 1 of the year following the tax year involved within which to file the adjusted or amended returns. If the Assessor refuses to accept the amended returns and adjust the assessments accordingly, we added to the law that the taxpayers may file appeals directly to the State to enforce the accepted of the amended returns. There are time limits imposed, so please check the statutes in this regard.

However, since passage of the law permitting taxpayers to file amended schedules, the State has held that only the person or company that filed the original return could file an amended return.

This prevented a purchaser from correcting errors which may have been made by the prior owner. The Assessors and the State simply held that a new owner had no rights to correct the return even though the new owner may have responsibility for payment of all or a portion of the taxes.

Although this was a bureaucratic and arbitrary position at best, it was very difficult for the taxpayers to overcome this position. The governments have enormous powers to enforce such erroneous positions.

The good news is that our firm was recently successful in obtaining a ruling from the Tennessee Assessment Appeals Commission which overruled the State and held that a purchaser of the company or assets was a successor in interest to the original owner. Due to this Decision, the purchaser taxpayer now has the same rights as the original owner. The taxpayer may file the necessary amendments to the original tangible personal property schedule in order to correct any erros and receive a refund of the overpaid taxes.

In the future all such affected taxpayers should be able to file amended returns.