Tennessee Relief Funding Overview
On June 2, 2020, Gov. Bill Lee announced the use of federal coronavirus relief funds to aid Tennessee small businesses affected by the COVID-19 crisis. The Tennessee Business Relief Program will direct approximately $200 million in relief funds through the Tennessee Department of Revenue (DOR) to small businesses for expenses incurred as a result of mandatory business closures. This program is directed toward small businesses with annual gross revenue below $10 million. Roughly 28,000 businesses in Tennessee are expected to qualify, with more than 73 percent of the recipient businesses generating annual gross sales at or below $500,000. Businesses may qualify regardless of participation in separate COVID-19 relief programs, such as the Paycheck Protection Program.
Eligibility for the program is based on information already available in the Tennessee DOR’s tax system; no application is required. The department began sending eligibility notifications the last week of June either by email, if an email address was already on file, or by physical letter. Upon notification, businesses are asked to complete an online pre-award certification to verify eligibility and agree to the program’s payment guidelines. Once certification has been completed and a business’s eligibility is confirmed, the department will issue a business relief payment by either direct deposit or check. Payments for eligible businesses will be issued beginning the first week of July. These relief funds aren’t considered loans and don’t have to be repaid.
The relief payment amount will be based on the business’s annual gross sales. Please refer to the table below:
The determination of annual gross sales is based on the business as a whole, rather than by individual locations. A single payment will be distributed even if that business includes multiple locations. Gross sales will be determined by the greater of either reported gross sales on its calendar-year 2019 sales tax returns or gross receipts on its most recent business tax return. Businesses open for less than 12 months are eligible for the relief program. The department is still finalizing a method of measuring annualized gross sales for new businesses.
The relief funds are intended to mitigate financial disruption resulting from the COVID-19 crisis. Businesses must maintain records regarding how the funds are spent. Funds must not be used for payment of tax liabilities to a government agency. Recipient businesses are subject to potential audit by the state of Tennessee, and funds are subject to recapture if payment requirements aren’t met.
Please visit the Tennessee DOR website for a full listing of program requirements and specific types of eligible businesses.
For more information, reach out to your BKD Trusted Advisor™ or use the Contact Us form below.