Tennessee Franchise Tax Refund Opportunity 

Corporations, partnerships, and limited liability companies registered or doing business in Tennessee are subject to the state’s franchise and excise taxes. Up until May 10, 2024, the franchise tax was imposed on the greater of a taxpayers apportioned net worth, or the value of real and tangible property owned or used in Tennessee.  

The Tennessee House Bill 1893 repeals the state’s franchise tax alternative measure, removing the franchise tax base imposed on real and tangible property owned or used in Tennessee. For tax years ending on or after January 1, 2024, franchise tax will now be based solely on the net worth measure.   

There will be tax relief provided to businesses who have paid on the alternative base for returns filed on or after January 1, 2021, covering a tax period that ended on or after March 31, 2020, allowing them to seek refunds from the Tennessee Department of Revenue. Refunds will be determined by the difference between what was paid with the real and tangible property base, and what would have been paid using the apportioned net worth base.   

To determine how this change may affect your business, please reach out to your trusted BRC tax advisor. 

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The information contained in this article is for informative purposes only and should not be relied on when making any business, legal, or other decisions. This information may be updated without notice and/or may not contain the most current information that is available related to this topic.