Gov. Lee signs $1.6B franchise tax refund, $400K repeal into law

Published 2:46 pm Friday, May 10, 2024

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By Jon Styff

The Center Square

The property portion of Tennessee’s franchise tax has been repealed and businesses will be eligible for a rebate of up to three years of those taxes.

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Tennessee Gov. Bill Lee signed the bill into law Friday. The rebate could cost the state up to $1.6 billion.

The tax will not be based on the taxpayer’s net worth and a refund can be requested by Nov. 30 for tax years ending on or after March 31, 2020.

The Tennessee Department of Revenue sent out notice of the bill’s impact last week.

The Department of Economic and Community Development will post the names of businesses receiving a rebate for a 30-day period.

Businesses will have between May 15 and Nov. 30 to apply for the three-year rebate and then the information will be posted from May 31, 2025 to June 30, 2025 in four categories of businesses that receive $10,000 or more of rebate, those that receive between $751 and $10,000, those who receive $750 or less and those that still have rebates pending.

House Majority Leader William Lamberth, R-Portland, said during bill debate that 81% of the tax rebate recipients are businesses in Tennessee and 62% are small businesses that will receive refunds of $5,000 or less.

Companies that receive the rebate will be required to sign a waiver to not sue the state over the tax.