$813.5M Franchise Tax Refund: Tennessee House Approves Significant Reduction

House Bill 1893 is a step forward that requires corporations receiving franchise tax rebates to disclose their information

The Tennessee House proposes requiring corporations to use tax credits to offset refund amounts

House Bill 1893, which seeks to repeal and reimburse the state’s franchise tax, has advanced significantly in the Tennessee House thanks to two significant changes. One of the changes requires the corporations that benefited from a portion of the $813.5 million rebate to be disclosed on the website of Tennessee’s Department of Economic and Community Development. To further reduce the bill’s overall cost, the bill now mandates that these businesses use any departmental tax credits to offset the refund amount.

While abolishing the franchise tax is an excellent policy, Representative William Lamberth highlighted that he does not believe it to be unconstitutional. This action also guarantees that any excess money allotted for the refund won’t be used for any other reason, acting as a safety net in case refund demands turn out to be more than originally projected.

$813.5M Franchise Tax Refund: Tennessee House Approves Significant Reduction (PHOTO: Pix4free)

READ ALSO: Clean Energy Projects: Newly Released Guidelines From The U.S. Treasury Department And The IRS

Strategic Cost Reduction: The Senate Bill Fiscal Note indicates a Reasonable Drop in the Cost of Repealing the Franchise Tax

According to Smart News, the Senate version of the bill’s fiscal note, which was once estimated to be $1.55 billion, shows a purposeful decrease in the bill’s cost. This cut is in line with the budget amendment proposed by Governor Bill Lee, which would transfer $351.7 million from the current fiscal year’s budget to the franchise tax refund fund. Lee’s initial budget proposal allocated $1.2 billion for the fund in addition to a $410 million fall in state tax collections, even though it was anticipated that tax collections would drop by over $400 million for the upcoming fiscal year and that the fund would ultimately lose $405 million annually. Under the updated law, which intends to simplify tax procedures while providing clarity regarding corporate tax credits and refund distribution, businesses have until February 3, 2025, to file for a rebate.

READ ALSO: Unlocking Tax Benefits: Key Facts For Claiming Adult Dependents- Check It Out!