Tennessee House Bill HB1117

Tennessee 2023-2024 Regular Session

• Introduced: 1/31/23
• Refer: 2/2/23

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, Part 20 and Title 67, Chapter 4, Part 21, relative to exemptions from franchise and excise taxes.

Impact

If passed, HB1117 would specifically alter existing tax codes, granting exemptions to certified community development entities that use federal funding to expand operations in low-income areas. The effective date for these changes is set for January 1, 2024, which suggests that communities may begin to see the benefits of this legislation soon after. This shift is part of a broader initiative to enhance economic growth and support local enterprises by alleviating the financial burdens typically associated with franchise taxes.

Summary

House Bill 1117 aims to amend the Tennessee Code Annotated by introducing new tax exemptions related to community development entities. This includes provisions for communities and nonprofits that support low-income areas and businesses through the federal new markets tax credits. By allowing these entities to receive exemptions from franchise and excise taxes, the bill seeks to stimulate economic development and encourage private investments in underserved communities across Tennessee.

Contention

While proponents argue that the bill is a step forward in aiding community investments, there may be concerns about equitable distribution of benefits and the potential impact on state revenue from tax exemptions. Critics could argue that these tax breaks may not sufficiently ensure that the economic benefits reach the intended communities. Furthermore, questions around regulatory oversight of these entities could also surface, creating dialogues on accountability and ensuring that the funding genuinely contributes to community development rather than benefiting corporations without substantial local impact.