Amends TCA Title 67, Chapter 4.

CREDIT OR REFUND As of January 1, 2025, this bill provides that an eligible healthcare provider is entitled to a credit against business, excise, and franchise taxes paid pursuant to the law relevant to privilege and excise taxes equal to unreimbursed TennCare costs; so long as the amount of credit that may be utilized by the provider in a taxable year is limited to 50 percent of the total tax liability of the provider for business, excise, and franchise taxes. As used in this bill, "eligible healthcare provider" or "provider" means (i) a healthcare provider who participates as a provider in the TennCare program or a successor medicaid program or (ii) a group practice that holds a contract with the bureau of TennCare or a managed care organization participating in the TennCare program or a successor medicaid program. This bill authorizes any unused credit to be carried forward in any tax period until the credit is taken. However, the credit must not be carried forward for more than five years. The credit allowed under this bill is for taxes only and is not allowed for penalty and interest. This bill authorizes, in lieu of a credit against business, excise, and franchise taxes pursuant to this bill, an eligible healthcare provider to elect to receive a refund equal to unreimbursed TennCare costs so long as the taxpayer uses all of the proceeds from the refund to make a charitable contribution as defined by federal law. This bill requires an eligible healthcare provider who claims a credit or a refund authorized by this bill to use forms prescribed by the department of revenue ("department"). In the application, the provider must certify to the department the amount of unreimbursed TennCare costs and reimbursable costs during the taxable year, and provide evidence of those costs as required by the department. The eligible healthcare provider must notify the department within 60 days of any changes that may adversely affect the provider's eligibility status. This bill authorizes the commissioner of revenue to conduct audits or require the filing of additional information necessary to substantiate or adjust the amount of the credit or refund allowed by this bill, and to determine that the provider has complied with all requirements of this bill for the credit or refund. REPORT On or before January 1, 2027, this bill requires the department to submit a one-time report to the finance, ways and means committees of the house of representatives and the senate, setting forth the clear, relevant, and ascertainable metrics and data requirements that the department will track under this bill in order to allow the general assembly to measure the effectiveness of the tax expenditure allowed in this bill. PASS-THROUGH ENTITIES This bill provides that tax credits or refunds authorized by this bill that are earned by a partnership, limited liability company, S corporation, or other similar pass-through entity, must be allocated among all partners, members, or shareholders, respectively, either in proportion to their ownership interest in the entity or as the partners, members, or shareholders mutually agree as provided in an executed document. Within 30 days after the receipt of an application, the department must allocate tax credits or refunds based on the dollar amount of contributions as certified in the application.