NASHVILLE, Tenn. — Some records are missing to vet state tax credits for companies that locate national, regional or state headquarters in Tennessee, a recent audit states.
According to the Chattanooga Times Free Press , the Revenue Department’s Division of State Audit found three credits worth $1.6 million for three companies lacked evidence that invoices were reviewed to support approval of credits.
The audit looked into all 22 qualified headquarters facility tax credits approved from 2014 until earlier this year.
Revenue officials say they thought the invoices were considered temporary records and could be destroyed.
For the same reason, the comptroller’s audit says Revenue’s audit division didn’t formalize policies for tax credit approval and documentation.
The audit also says some credits didn’t meet the requirements to qualify as tangible personal property.
Revenue officials contend their records show the credits qualified as tangible personal property and tax auditors reviewed other documents to confirm it.
Revenue management says the companies still have the destroyed records.
The Revenue Department agreed that it should get or retain copies of the invoices and have a secondary review to make sure companies actually qualified for the credits.
However, the department said it “always ensured that multiple levels of review occurred prior to approving all tax credits and that all invoices were available throughout the entire review process.”
The audit finding prompted further criticisms from the Beacon Center of Tennessee, which advocates for free-market policies.
“The Comptroller audit proves the very point Beacon has been making for the last couple years: that there is almost no accountability when it comes to tax incentives for businesses,” said Beacon spokesman Mark Cunningham.
Information from: Chattanooga Times Free Press, http://www.timesfreepress.com