spot_img

Tennessee House passes lower franchise tax refund on business tax repeal bill

Date:

spot_img

(The Center Square) – The Tennessee House moved forward with its franchise tax repeal and refund, passing the bill 68-20 and sending it back to the Senate with a much lower fiscal note.

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 those 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.

The Senate will receive the bill back on its message calendar and have the opportunity to concur or ultimately send the bill to a conference committee.

“It’s simply a policy debate on whether or not we should cut the franchise taxes going forward, making us more competitive to other states to be able to attract businesses and retain businesses,” said sponsor and House Majority Leader William Lamberth, R-Portland.

Lamberth noted he was not allowed to speak about the other chamber’s bill but he believed the House version is the best version.

“It’s one of the biggest business tax cuts to business that you will probably ever see in your time in the Legislature for as long as you may serve here,” Lamberth said. “It’s certainly one of the biggest ones that I’ve seen. And it’s really good public policy.”

Rep. Bob Freeman, D-Nashville, said the mention of threats by businesses to sue over the past franchise tax is something he doesn’t believe would succeed.

“If these companies want to sue the state of Tennessee as everyone here has said, let them do it and let’s handle it at that point,” Freeman said. “To come back and admit defeat before the battle has even started is not really what I think this body wants to do.”

Both versions of the bill moving forward note that the franchise tax repeal will cost the state more than $400 million per year in tax collections moving forward. Freeman said that he believes that estimate is below reality as businesses begin to manipulate their revenue numbers to lower their tax obligations, something they did not have incentive to do in the past.

“Taxpayer dollars need to go toward investing in the people who are paying the taxes,” said Rep. Justin Pearson, D-Memphis. “Those are our constituents who in this state are struggling and many of them struggling financially and economically because of capitalistic exploitation by many corporations.”

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.

Read the Black Chronicle Black History Edition for Free! Click Below

Read the Black Chronicle Black History Edition for Free! Click Below

spot_img
spot_img

Subscribe

Share post:

Popular

More like this
Related

Illinois legislators considering tax and spend policies in final days of session

(The Center Square) – Illinois legislators continue to consider...

WA Traffic Safety Commission unveils new messaging amid increase in fatal crashes

(The Center Square) – The Washington Traffic Safety Commission...

Lawmakers to grill Biden’s energy secretary over energy costs, regulations

(The Center Square) – Lawmakers will grill President Joe...

Illinois quick hits: DePaul pro-Palestinian encampment dismantled

DePaul pro-Palestinian encampment dismantled ...