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Amended Franchise Tax Bill Moves On
HB1893/SB2103 was amended substantially changing the administration's proposal to remove the franchise tax's real and tangible property alternative minimum measure. The amendment includes several concerning provisions.
First, the amendment shrinks the refund period from three years plus the current tax year to one year plus the current tax year. Second, it would require a business receiving a refund to sign away their right to sue the state over the alternative minimum measure's constitutionality. This was going to be included on the refund form, but the House's amendment puts this requirement in statute.
Third, it would require the Department of Revenue to publish the names and refund amounts of any business receiving a refund on their website. This is deeply concerning to the Tennessee Chamber as it would upset a long-held precedent of taxpayer anonymity and expose businesses to being shamed for simply requesting tax refunds that the state would be stating it owes to these businesses.
Fourth, the amendment would allow for businesses that want to remain in the current environment – where they pay on real and tangible property instead of going to net worth – can do so if the real and tangible property measure results in a higher tax liability than the net worth measure would. This is important to businesses with franchise tax credits that would have been devalued if they had not been able to use those credits because of a lower tax liability because of the bill's passage. The Tennessee Chamber strongly supports this provision and will urge its inclusion in the final bill.
Finally, the current drafting of the amendment changes the period for requesting a franchise refund from three years to one year for all franchise refunds moving forward. The Tennessee Chamber is very concerned that this would make the refund process unworkable for businesses moving forward.
Other Bills Being Considered:
Tort Liability -- SB2018/HB2434 Declares that a private entity is not liable in a class action resulting from a cybersecurity event unless the cybersecurity event was caused by willful, wanton, or gross negligence on the part of the private entity.
County Government -- SB2261/HB2426 Allows county governments to raise impact fees for new construction of residential, commercial, and industrial buildings of up to $1.50 per square foot
Information provided by the Tennessee Chamber of Commerce.
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