Amends TCA Title 67, Chapter 4, Part 20.
ON APRIL 14, 2021, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 191, AS AMENDED.<br /> <br /> AMENDMENT #1 rewrites this bill. Under present law, there is allowed against the sum total of franchise and excise taxes a credit equal to 1 percent of the purchase price of industrial machinery purchased during the tax period covered by the return and located in this state. This amendment adds to the present law provisions governing the credit that a taxpayer that has previously made a capital investment in excess of $1 billion during a single investment period and has previously qualified for the sales and use tax credit qualified headquarters facilities (as provided in present law) and that qualifies during the applicable tax year for, but chooses to not make, the election under the present law provisions governing apportionment of net earnings, will, upon written request submitted to the commissioner, be allowed to offset up to 100 percent of its excise tax liability by the industrial machinery credit, or any carryforward of the industrial machinery credit, if the commissioners of revenue and economic and community development determine that increasing the percentage of offset above 50 percent (the present law limit on the credit) will allow the taxpayer to maximize the use of its industrial machinery credits while resulting in an excise tax liability substantially equal to the amount otherwise due if the taxpayer had made the apportionment election. The commissioners of revenue and the commissioner of economic and community development will determine the percentage of excise tax liability allowed to be offset, above that otherwise allowed amount and the period during which the increased offset will continue. The present law apportionment election provision provides that a taxpayer whose principal business in this state is manufacturing may elect to apportion net earnings to this state by multiplying the earnings by a fraction, the numerator of which is the total receipts of the taxpayer in Tennessee during the taxable year and the denominator of which is the total receipts of the taxpayer from any location within or outside of the state during the taxable year.<br />
ON APRIL 14, 2021, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 191, AS AMENDED.<br /> <br /> AMENDMENT #1 rewrites this bill. Under present law, there is allowed against the sum total of franchise and excise taxes a credit equal to 1 percent of the purchase price of industrial machinery purchased during the tax period covered by the return and located in this state. This amendment adds to the present law provisions governing the credit that a taxpayer that has previously made a capital investment in excess of $1 billion during a single investment period and has previously qualified for the sales and use tax credit qualified headquarters facilities (as provided in present law) and that qualifies during the applicable tax year for, but chooses to not make, the election under the present law provisions governing apportionment of net earnings, will, upon written request submitted to the commissioner, be allowed to offset up to 100 percent of its excise tax liability by the industrial machinery credit, or any carryforward of the industrial machinery credit, if the commissioners of revenue and economic and community development determine that increasing the percentage of offset above 50 percent (the present law limit on the credit) will allow the taxpayer to maximize the use of its industrial machinery credits while resulting in an excise tax liability substantially equal to the amount otherwise due if the taxpayer had made the apportionment election. The commissioners of revenue and the commissioner of economic and community development will determine the percentage of excise tax liability allowed to be offset, above that otherwise allowed amount and the period during which the increased offset will continue. The present law apportionment election provision provides that a taxpayer whose principal business in this state is manufacturing may elect to apportion net earnings to this state by multiplying the earnings by a fraction, the numerator of which is the total receipts of the taxpayer in Tennessee during the taxable year and the denominator of which is the total receipts of the taxpayer from any location within or outside of the state during the taxable year.<br />
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