Image Credit: capitol.tn.gov
The Center Square [By Jon Styf] –
A bill adding tax credits for research and development from energy and tech companies along with banning tax credits and incentives for countries of concern passed the Tennessee House Government Operations Committee on Monday.
A fiscal note on House Bill 1843 noted it would cost Tennessee $43.2 million in fiscal year 2025, $113.8 million in 2026 and $127.0 million in 2028. The note says the state will begin seeing increased state funds from the bill starting with $68.3 million in 2036 and $164.8 million in 2037.
China, Iran, North Korea, Cuba, Venezuela and the Syrian Arab Republic are listed as countries of concern. Rep. John Ragan, R-Oak Ridge, sponsored the bill and said the list came from the U.S. State Department.
Other states, such as Florida, have taken targeted actions to block the countries of concern.
Ragan said the tax credits would “help keep our energy and tech companies on the cutting edge” by writing off research and development expenses.
The Allied Investments in Tennessee Act would allow businesses to immediately deduct depreciable assets in their first year being used or the year that the costs related to research and development of the experimental expenditures occur.
Ragan noted China is known to steal intellectual property and the purpose of this bill is to block Chinese companies and others on the list from taking incentives and stealing U.S. technology.
Rep. Justin Jones, D-Nashville, asked Ragan why he would target people from those parts of the world with a bill.
“I have had the opportunity to serve in that part of the world,” Ragan said. “I have worked with people over there that live there and I have the highest affection and respect and admiration for them. I have also had to stand against those bent on killing me and my comrades. I resent your implication that this is somehow against those that come to this country for good reasons. This is against those who would do us harm, injury, and steal from us.”
A fiscal note on the bill says that 27 projects between the Tennessee Department of Economic Community Development and companies in countries of concern could be impacted by the bill.
Ragan noted the TNECD told him sometimes it is difficult to identify the country where third-party suppliers are but the department will do its best to resolve those questions.
The fiscal note says the bill would require TNECD to add 20 additional positions (10 Attorney positions, five data and research specialist positions, five auditors positions) at a cost of $2.3 million starting in the 2024-25 fiscal year.
About the Author: Jon Styf, The Center Square Staff Reporter – Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Follow Jon on Twitter @JonStyf.