Recent actions by the Tennessee Department of Revenue (TDOR) are presenting a significant financial threat to Tennessee car wash operators. DRB Systems, LLC, a leading provider of technology-enabled devices and software solutions to the car wash industry, has contributed $39,500 to efforts aimed at rectifying the situation.
“We believe it is important to get out in front of this issue quickly to protect not only Tennessee operators but the industry at-large,” said Dan Pittman, CEO of DRB Systems.
The TDOR auditors have held that providing assistance to vehicles entering a building (guiding vehicles onto conveyors, folding over side mirrors, etc.) is subject to sales tax. This is not how most Tennessee car wash operators have interpreted the law, which was written almost 50 years ago and does not address the modern express car wash.
A recent audit of one Tennessee car wash resulted in a tax assessment that could exceed $3.5 million by year-end 2018. The operator has filed an administrative appeal. If the TDOR decision stands, it could open all Tennessee car wash operators up to similar assessments and potentially have a domino effect in other states.
“We’re proud to stand by our customers and fight for the best interests of the industry,” Pittman said.