[Chugalug] Ot: business attorney

Mike Harrison cluon at geeklabs.com
Wed Mar 27 23:59:18 UTC 2013

A shy chugalurker just emailed me 2 questions:

"Where would you, and (briefly) why?  And top 3 specific reasons TN is
on *your* suck list?

You know, if you're feeling bored and feel like imparting wisdom, and
I'd actually like to hear *your* answers to those questions.  Because
you see things differently than most.... :)"

My answers:

As a business owner, I have been attacked by the TDR (Tn Dept of Rev) 
several times. My lawyer for the biggest one: 
http://www.bakerdonelson.com/carl-e-hartley/ is one of the best in the 
country, why? Because TN has one of the more punative department of 
revenues for any state. TDR claimed the business (HTS Inc aka Chattanooga 
Online) owed the state of TN > 500k. The audits were insane. They wanted 
us to pay sales tax on vehicles, the building, and things we clearly had 
already paid sales tax on. They lost, but it cost HTS a fortune to fight 
it, approx $30k-50k (i didn't see the final bills).

TDR also hounded several of my customers, and I got involved. In one case, 
a developer charged a few grand for a functional e-commerce website.  TDR 
"valued" the e-commerce website at the amount of annual revenue it brought 
in.. and wanted sales tax, from the programmer, for the assayed value of 
the website, not what he got paid. In the end, custom web development / 
programming was seen as work for hire, not a taxable product.

In other case, a system was used for brokering truck loads (logistics)
and they came after him for a percentage of the fees he made, for the 
estimated percentage of a trip across TN. For example, if the website
brokered a load from S. Georgia to St. Louis and the brokering fee was 
$10 and the truck went though TN for 20% of the trip, they wanted taxes on 
$2.00... Then they went after the value of the load.. Steve moved his 
company and servers to Alabama.

In fact, if you wonder why some things in internet-land are not subject to 
sales tax, thank Carl Hartley and others for fighting it.

Personally, I've now been hit up TWICE by the TDR for them claiming that 
1099-misc income from doing programmming, networking and such, from income 
data they get from the IRS, is supposedly 1099-div (dividends) income and 
they hit me up for not filing it, with penalties. Bob Corkers office got 
involved the second time and fixed it.

More information about the Chugalug mailing list