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REVENUE INVESTIGATION LEADS TO ARREST OF CHATTANOOGA
BUSINESSMAN ON SALES TAX EVASION CHARGES
NASHVILLE, Tenn. -
Special agents of the Tennessee Department of Revenue conducted the investigation that led to the arrest of Tommy James Hudgins on sales tax evasion charges on Friday, July 28. Hudgins, 34, is the owner of Affordable Tires, a retail tire store, located at 5008 Highway 58 in Chattanooga, Tenn.
"This investigation underscores that sales tax is a 'trust tax' to which retailers have no legal entitlement," said Commissioner Loren L. Chumley. "Consumers pay the tax with the belief the money will be used by the state and local governments for the common good."
Hudgins was indicted by the Hamilton County Grand Jury on July 20, 2006, on 14 counts of sales tax fraud. The indictment charged that Hudgins unlawfully and knowingly evaded and defeated sales tax due the state of Tennessee by filing false sales tax returns for Affordable Tires for the periods February 2001 through March 2002. These fraudulent actions resulted in Affordable Tires failing to report $213,696.22 of taxable sales for the business and failing to remit $17,627.95 of the proper sales tax collected and due. This is in violation of Tenn. Code Ann. Section 67-1-1440(g).
A $10,000 bond was set. If convicted, Hudgins could be sentenced to a maximum of two years on each count in the state penitentiary and fined for his failure to remit sales tax collected and filing false returns. In addition, civil tax, interest, and penalties are due the state.
Citizens who suspect violations of the Tennessee revenue laws should call the toll-free tax fraud hot line at (800) FRAUDTX (372-8389).
The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws established by the legislature and the collection of taxes and fees associated with those laws. The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2005-2006 fiscal year, the department collected $10.3 billion in state taxes and fees. In addition to collecting state taxes, $1.8 billion of local sales tax was collected by the department for local governments during the 2005-2006 fiscal year. Besides collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to www.Tennessee.gov/revenue.
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