NASHVILLE, Tenn. (WTVF) — Tennessee lawmakers have cut taxes before, but this year, they also want to give businesses millions of dollars in tax refunds. Only, the Tennessee House and Senate can't agree on how much they should refund and how to go about it.
Tennessee's business tax is called the Franchise and Excise Tax. But lawmakers don't just want to eliminate the property value aspect of the F&E, they want to give businesses rebates from previous tax years. By the way, Tennessee tax dollars will pay for those rebates. Lawmakers agree on the concept, just not the specifics.
Under the Senate plan, 1.9 billion dollars will be set aside for corporations to apply for tax rebates, dating back three years of tax filings.
The House plan is vastly different. They want to set aside $800 million for corporations, but it would only cover rebates for one tax year. "We value our business culture here, but we feel like going back a year is plenty. The Senate would like to go back a full three and a half years, do a full rebate for the full period someone could apply for a change to their F&E taxes," explained Rep. William Lamberth, R-Portland and House Majority Leader.
The House also wants to publish a list of the businesses that apply and receive rebates, in an effort to be transparent. "If we do a rebate, which again is extraordinary, that is above and beyond what we’ve done in the past. Then the people of Tennessee, you should know, who’s getting your tax dollars as a rebate," explained Lamberth.
The House version also comes with a provision — if a company accepts a rebate, they agree to not take the state to court over the Franchise and Excise Tax.
The threat of a court battle is why Gov. Bill Lee has been pushing this idea in the first place. Even though no company has officially filed a lawsuit, the Governor's office claims dozens of companies have made the threat. So far, the Lee administration has been unwilling to share which companies made those threats.
So how will the chambers settle on one version of the bill?
Both the House and Senate will send delegates to a conference committee, which will meet and negotiate a unified plan. NewsChannel 5 asked leaders of both chambers to give us a glimpse into the negotiation process but lawmakers rebuffed. "Well, I don’t think the leader or myself or anybody on the negotiating team are going to reveal any of our negotiations gives or takes until we’ve started that process," said Sen. Bo Watson, R-Hixon and the Senate Finance Chair.
"We’re much closer together than we are further apart," said Lamberth.
It's also possible the two chambers can't reach a compromise and the bill fails for the year. NewsChannel 5 will keep you updated.
Fostering Hope provides Christmas for kids in foster care. I'm delighted to see Fostering Hope expand this year to expand their reach to now include kids in Foster care in metro AND foster kids in East TN hard hit by Helene.
-Bree Smith
