Amends TCA Section 67-4-2007 and Section 67-4-2014.

This bill requires all taxpayers that are for-profit hospital corporations operating within the state and that are members of a controlled group according to federal law file excise tax returns on a combined basis, reflecting the net earnings for the next preceding fiscal year for business done in this state during that fiscal year. The combined return must be computed based on the combined net earnings of the entire group, with each member's net earnings or losses and each member's apportionment ratio computed and reported as if on a separate basis.<br /> <br /> Present law requires a corporation or other entity subject to the taxes imposed under state law and that qualified before January 1, 1999, with the department of revenue ("department") as a hospital company as defined under prior law ("hospital company") to file its franchise and excise tax return on a combined basis, together with all other corporations or other entities subject to the taxes imposed under state law that are members of its controlled group, and that are doing business in and taxable by this state, apportioned or allocated as to each member separately and then combined. The combined franchise and excise tax returns must be signed on behalf of one member of the combined controlled group for itself and on behalf of the other members of the combined controlled group, and the signature will constitute representation and evidence of authority to file on behalf of all members of the combined controlled group. The combined return must contain all financial statements and schedules that would be required of each member filing a separate franchise and excise tax return. Each member's net earnings or losses subject to carryover, as the case may be, and each member's apportionment ratio, and applicable supporting schedules must be computed separately as would be required by law if no combined return were required. The franchise and excise tax must be computed for the combined group based on the combined net earnings or net losses of the members as combined and shown on the combined return filed for members of the controlled group of companies doing business in this state. The losses available to each member of the controlled group under current or prior law shall be available for offset against the net earnings of the combined group in the first year of filing on a combined basis, and any portion that is not used to offset net earnings of the combined group in the first combined year shall be carried forward on a combined basis to be available as an offset to future net earnings of the combined group in accordance with and subject to the time limitations set forth in state law; provided, that such combination must not extend the time limitation of any then existing net operating losses. A member of the combined group shall not file its franchise and excise tax return on a separate basis without the consent of the commissioner of revenue.<br /> <br /> This bill removes the provisions above and requires that for tax years beginning on or after January 1, 2025, all for-profit hospital companies file their franchise and excise tax returns on a combined basis, together with all other entities of their controlled group doing business and taxable in this state. The combined return must be signed by an authorized member of the combined group and must contain all required financial statements and schedules. The franchise and excise tax must be computed based on the combined net earnings or net losses as shown on the combined return, subject to any applicable loss carryovers and time limitations set forth in state tax law.<br /> <br /> This bill applies to tax years beginning on or after January 1, 2025.<br />