Section 1320-02-01-.35 - NONJUDICIAL SALES(1) A sale of property on which the state has or claims a lien, or a title derived from enforcement of a lien under the provisions of this chapter shall, except as otherwise provided, be made subject to and without disturbing such lien or title of the state if notice of such lien or title was recorded in the place provided by law for such filing or recording more than thirty (30) days before such sale and the state is not given notice of such sale in the manner prescribed in subsection (2) hereof when such sale is made pursuant to: (a) an instrument creating a lien on such property or(b) a confession of judgement on the obligation secured by such an instrument, or(c) a nonjudicial sale under a statutory lien on such property. The term "nonjudicial sale" as used herein includes, but is not limited to, the divestment of the taxpayer's title to property which occurs by operation of law as well as those which result from a public or a private sale. A nonjudicial sale made pursuant to a lien even though notice of the nonjudicial sale is given to the state through the Commissioner or his delegate.
(2)(a) Except in the case of the sale of perishable goods described in paragraph (2)(c) hereof, a notice of a nonjudicial sale shall be given in writing, by registered or certified mail or by personal service, not less than 25 days prior to the date of such sale. Such notice shall be addressed to the Commissioner of Revenue. It shall be submitted in an envelope addressed to the attention of, or personally delivered to, the Director, Tax Enforcement Division. Notices required to be made under the provisions of this section shall be considered timely made only if actual notice is received by the Commissioner or his delegate in a timely manner. In the event that notice of a sale is given in accordance with the provisions hereof with respect to a scheduled sale which is postponed to a later time or date, the seller of the property is required to give notice of the postponement to the
Commissioner in the same manner as is required with respect to the previously scheduled sale. In any case in which notice of sale is required to be given with respect to a scheduled sale and notice of the sale is not given, any postponement of the scheduled sale shall not affect the rights of the state under T.C.A. § 67-1-1433.
(b) Notwithstanding the notice requirements of this section, any sale of property described in subsection (1) hereof shall discharge or divest such property of the lien or title of the state if the Commissioner to his delegate consents to the sale of such property free of such lien or title. The Commissioner or his delegate may, in his discretion, give such consent for the state with respect to the sale of property in appropriate cases. Such consent shall be effective only if given in writing and shall be subject to such limitations and conditions as the Commissioner or his delegate may require. The Commissioner or his delegate may not, however, consent to a sale of property under this section after the date of such sale or where request therefor was not timely made (i.e., before the sale) and in the same manner as a notice of sale . Any person desiring the state's consent to sell property free of a tax lien or a title derived from the enforcement of a tax lien shall submit a written application therefor to the Commissioner of Revenue requesting that such consent be given. The application shall be submitted in an envelope addressed to the attention of, or personally delivered to, the Director, Tax Enforcement Division. It shall contain a declaration that it is made under the penalties of perjury and shall include the following information:
1. The name and address of the person submitting the notice of sale.2. A copy of each notice of state tax lien affecting the property to be sold and a copy of the financing statement or trust deed or other lien interest being enforced.3. With respect to the property to be sold, a detailed description, including location, of the property affected by the notice, the date, time, place, and terms of the proposed sale of the property, and in the case of a sale of perishable property described in paragraph (2)(c) of this section, a statement of the reasons why the property is believed to be perishable.4. The approximate amount of the principal obligation, including interest, secured by the lien sought to be enforced and a description of the other expenses (such as legal expenses, selling costs, etc.) which may be charged against the sale proceeds.(c) Notwithstanding the notice requirements of this section, any sale described in subsection subsection (l) involving personal property which is liable to perish or become greatly reduced in price or value by keeping, or which cannot be kept without great expense, shall discharge or divest such property of the lien or title of the state if notice of such sale is given to the Commissioner or his delegate at any time before such sale. Thus, in such cases the requirement that such notice shall be given more than 25 days before such sale is not applicable. However, notice thereof must be timely given, i.e., before the sale, and in the manner described here in above in all other respects. If a notice of a nonjudicial sale is timely given in the manner described, the nonjudicial sale of perishable goods shall discharge or divest the tax lien, or a title derived from the enforcement of a tax lien of the state in the property. The seller of the perishable goods shall hold the proceeds (exclusive of costs) of the sale of such goods as a fund, for not less than 30 days after the date of the sale, subject to the liens and claims of the state in the same manner and with the same priority as the liens and claims of the state had with respect to the property sold. If the seller fails to hold the proceeds of the sale in accordance with the provisions of this paragraph the seller shall be personally liable to the state for an amount equal to the interest of the state in the fund. However, even if the proceeds of the sale are not so held by the seller but all of the other provisions of this paragraph are satisfied, the buyer of the property at the sale takes the property free of the liens and claims of the state. In the event of a postponement of the scheduled sale of perishable goods, the seller is not required to notify the Commissioner or his delegate of the postponement.
Tenn. Comp. R. & Regs. 1320-02-01-.35
Original rule filed June 7, 1974. Amendment filed June 22, 1989; effective September 27, 1989.Authority: T.C.A. §§ 67-1-1439 and 67-1-1433.