Image: Tennessee Rep. William Lamberth, R-Portland, presents a franchise tax refund and repeal bill in the House Finance, Ways and Means Subcommittee. Image Credit: capitol.tn.gov
The Center Square [By Jon Styf] –
Tennessee’s franchise tax repeal and rebate appears headed to conference committee after the Senate refused to concur with House amendments Thursday.
The House will have the opportunity to concur and then a conference committee will be formed if it doesn’t.
Both bills would repeal the state’s business franchise tax moving forward, a move that will end about $400 million in annual collections.
The differences are in the rebate of prior franchise tax payments.
The House version of Senate Bill 2103 would refund $713.6 million or one year of franchise tax while the Senate passed a version worth three years of franchise taxes for an estimated $1.6 billion.
The House version also requires the companies receiving a refund to be named on the website of Tennessee’s Department of Economic and Community Development and those companies to first use any department tax credits to offset the refund amount.
Tennessee’s Department of Economic and Community Development does not name individual companies and the tax credits they receive but the Tennessee Department of Revenue reported $1.1 billion in tax credits carried over from the 2022-23 fiscal year. Of that, $830 million was for industrial machinery credits and $252 million was job creation credits.
Tennessee offers a 1% to 10% tax credit on the purchase of qualified industrial machinery and between $4,500 to $5,000 per new job tax credit for companies expanding or coming to the state.
Those incentives are in addition to FastTrack grants received by companies.
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.