More than 58,000 Tennessee businesses received franchise tax breaks
More than 58,000 businesses in Tennessee benefited from a new corporate franchise tax break, as reported by the Tennessee Department of Revenue. The breakdown reveals that 15,868 businesses received over $10,000 in tax cuts, while 33,376 businesses received between $751 adn $10,000, and 9,240 businesses received $750 or less. This tax cut, passed by the General Assembly in 2024, was estimated to cost the state $1.6 billion. Though, corporate tax collections saw a significant decline, with a reported drop of $153.2 million, attributed to these tax changes and prior year tax credits. While supporters argue that these cuts are necesary to remain competitive and attract businesses,critics,including several Democrats,argue that the tax cuts exacerbate budget deficits and neglect essential public services. The list of businesses receiving tax breaks will be available on the Department of Revenue’s website until June 30.
More than 58,000 Tennessee businesses received franchise tax breaks
(The Center Square) – More than 58,000 businesses received a new corporate franchise tax break, according to a list from the Tennessee Department of Revenue.
The information released Saturday by the department does not say how much of a break each business received. The department’s list also shows 15,868 received a tax break of more than $10,000; 33,376 businesses received between $751 to $10,000; and 9,240 businesses received $750 or less.
The General Assembly passed a corporate franchise tax cut in 2024 that was initially estimated to cost the state $1.6 billion. The list does not give a total amount for the tax breaks issued.
April corporate tax collections were $153.2 million below estimates, a 13.2% drop, according to figures released by the department earlier this month, due in part to the cut.
“Corporate tax payments were notably lower this year due to tax policy changes that reduced taxpayers’ franchise tax liabilities,” said Gina L. Long, director of communications for the department, in an email to The Center Square. “Additionally, many corporate taxpayers are utilizing carryforward tax credits from prior years, and several large, nonrecurring payments were included in last year’s collections.”
House Majority Leader William Lamberth sponsored the bill signed by Gov. Bill Lee in May 2024.
“It’s simply a policy debate on whether or not we should cut the franchise taxes going forward, making us more competitive to other states to be able to attract businesses and retain businesses,” Lamberth said when presenting it to the House.
Nashville Sen. Heidi Campbell, D-Nashville, and other Democrats called the tax break a “billion dollar refund scheme.”
“Now, we’re staring down the largest budget deficit of the year – a direct result of these reckless tax breaks. Corporate tax collections have cratered, and Tennessee families are still paying sky-high grocery taxes, while our schools, roads and healthcare remain among the worst-funded in the nation,” Campbell said. “This is the real cost of trickle-down economics: corporate handouts while working families get left behind.
House Democratic Caucus Chairman John Ray Clemmons, D-Nashville, said families will “pay the price” for Lee and Republicans’ “fiscal recklessness.”
“Our budget has doubled since Republicans took control in 2011, yet are roads are in worse shape, our public schools are still underfunded, access to health care and child care has decreased, and costs of living have only gone up,” Clemmons said.
The list will remain on the Department of Revenue’s website until June 30.
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