Almost $1.2 billion business tax refund to businesses is scheduled to be voted on by Tennessee Lawmakers next week.
Senate Bill 2103: Tennessee Business Tax Refund
The Business Tax Refund could cost the state up to $1.5 billion and the repeal is $410 million less in annual franchise taxes.
The total cost of the Business Tax Refund would depend on how many businesses will apply for the Business Tax Refund after the state repeals the property portion of the franchise tax and then refunds the amount paid by businesses from 2020 up to 2023.
According to the Department of Revenue Commissioner, David Gerregano, Tennessee is the only state that he could find that taxes business property and the fund was set up to help evade litigation if the businesses tested the constitutionality of the tax.
This Business Tax Refund bill would be the lawmakers making a tax policy change by removing the property measure
Senator Jeff Yarbro, D-Nashville said that Tennessee has never refunded a franchise tax before and he is uninformed of any court forcing a state to pay a Business Tax Refund to businesses if a tax rule is later identified as unconstitutional.