Only days before the Tennessee General Assembly acts on a $28 billion budget, Revenue Commissioner Reagan Farr found himself getting a lighthearted grilling over a tax policy issue.
Farr was explaining to Senate lawmakers why people with backyard gas grills should pay sales tax on propane.
Propane users would have to pay an extra 7 percent or more to fire up their gas grills under legislation introduced by Gov. Phil Bredesen's administration to change some parts of the state tax code.
The sales tax exemption would not apply to propane "sold over the counter at location of the seller," according to the legislation.
Only propane gas delivered to the home of the purchaser would be tax-free.
During a Senate Finance Committee meeting on Friday, Farr was questioned about the legislation by state Sen. Tim Burchett, R-Knoxville.
Of all the contentious issues before lawmakers this year, Burchett noted that he has gotten scores of e-mails from constituents who don't want to pay the tax.
Some consumers have suggested the legislation might seem a little greedy when the state is enjoying good economic times. Year-to-date revenue collections in the state's current fiscal year were $257.2 million more than the budgeted estimate, according to the Department of Finance and Administration.
Historically, propane has been tax-exempt when it is used as a home energy fuel, Farr said.
"If you have a large (propane) tank ... and they come out and fill it and it heats your hot water heater and provides you with gas for cooking, that's exempt from sales and use tax," Farr explained. "However, if someone has a little five-gallon tank that they are going to use at their camp or at their business or anywhere else or at their grill to cook, then that is not for residential use and it is subject to sales and use tax. The majority of all dealers of propane have charged tax on those transactions."
Farr said the administration bill was needed "to clarify what the legislature always intended" and to address a group of lawyers.
"What happened is that a group of class-action attorneys ... didn't sue the (revenue) department, they sued the retailers of propane who had collected this (sales) tax in accordance with the way we had told them to collect the tax," Farr said. "And because it was a class action, it really put the retailers in a difficult situation. ... They were on the hook for this."
Burchett, a small businessman who said he used to sell propane, ended the short discussion with a story that drew some laughs.
"For the record I don't sell propane any more," Burchett said. "I had two Bills who worked for me - mild Bill and wild Bill. I had to get onto them about safety. So after my strenuous talking to them, I noticed when they filled people's propane tanks they would cup their cigarette away (from the propane)."