1469 South Main Street
Covington, TN 38019
Phone: 901.313.1072 Fax: 901.476.2756
Email: [email protected]
Tennessee has a reputation for flexible, broad-based incentive programs. The HTL Advantage region is no exception. We understand one size does not fit all. That's why we offer incentives crafted to meet the needs of business. Certain manufacturers may be eligible for no state property tax and/or no sales tax on many business expenses and raw material costs.
Tax on the greater of net worth or book value of property owned or used in Tennessee.
Tax rate is $0.25 per $100.
Finished goods inventory in excess of $30 million may be excluded.
Pollution Control Equipment is exempt from franchise tax base.
Property under construction and not being utilized is not included.
Property rented from the industrial development corporation may be valued by capitalizing it on the books.
Tennessee exempts two-thirds (2/3) of the capital investment of companies qualifying for the Job Tax Super Credit from the property measure of the franchise tax base during those tax years in which the annual Super Credit is allowed.
Tax is based on the net earnings of the company derived from doing business in Tennessee. Companies doing business in Tennessee and other states use a 3-factor apportionment, formula of property, payroll and sales with sales double-weighted.
Tax rate is 6.5%.
No throwback provision-sales outside of Tennessee are not taxed.
All capital losses are claimed in the year incurred.
Net operating losses can be carried forward for 15 years.
Net operating losses for projects of more than $100 million may be extended beyond 15 years.
Tennessee allows qualified business enterprises a credit against their franchise and excise taxes based on their capital investment and the number of jobs created. The amount of the credit and the period of time during which it can be used varies according to the size of the investment.
A company investing $500,000 and creating 25 net new jobs in a 12 month period can claim a Job Tax Credit of $4,500 per job to offset up to 50% of the combined F&E tax. Any unused Job Tax Credit may be carried forward for up to 15 years. The approval process for the Job Tax Credit requires a Job Tax Credit Business Plan be filed with the Department of Revenue prior to taking the credit.
Tennessee’s focus on creating job opportunities in rural areas of the state presents unique hurdles, and yet tremendous opportunity. Whether because of limited road access, lack of public infrastructure or difficulty in matching labor skills to job requirements, a different approach is needed. That’s why Tennessee offers a program aimed at addressing this challenge called the Rural Opportunity Initiative, or ROI. The ROI provides Enhanced Job Tax Credits to businesses locating or expanding in certain Tennessee counties considered Tier 2 or Tier 3 Enhancement Counties.
Haywood and Lauderdale Counties are Tier 3 Enhancement Counties, while Tipton County is Tier 2. Learn more about these enhanced incentives.
For larger, more capital-intensive investments, Tennessee has created a Super Credit that applies to those qualified businesses investing capital of $100 million or more and creating a minimum of 100 jobs paying at least 100% of Tennessee’s average occupational wage or investing $10 million in a qualified headquarters facility with the creation of at least 100 new headquarters jobs paying 150% of the average occupational wage. The average occupational wage for 2010 is $36,542, and the average occupational wage for 2011 is $37,360.
For capital investments in industrial machinery, Tennessee offers businesses an Industrial Machinery Tax Credit that may be used to offset up to 50% of the company’s F&E tax liability. To qualify for this credit, companies are not required to create new jobs. The credit applies to the purchase, installation and repair of industrial machinery as defined in T.C.A. 67-6-102. The credit also applies to the purchase and installation of computer, computer software and certain peripheral devices purchased in order to meet the capital investment thresholds of the Job Tax Credit.