Tennessee House Bill HB0988

Tennessee 2025-2026 Regular Session

• Introduced: 2/5/25
• Refer: 2/10/25
• Refer: 4/17/25
• Chaptered: 5/15/25
• Passed: 5/15/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 43, Chapter 16, Part 1 and Section 67-4-102, relative to subsidiaries of agricultural cooperative associations.

Summary

HB0988 amends Tennessee law to clarify that certain subsidiaries controlled by one or more agricultural cooperative associations are not to be treated as for-profit taxpayers doing business in the state for purposes of the privilege tax. The bill states legislative intent to exempt these subsidiary taxpayers when their profits are paid to, or used for the benefit of, the agricultural cooperative association, so that the subsidiary’s activities ultimately support Tennessee agriculture. The bill changes Tennessee Code Annotated § 43-16-148 and references the state’s tax definitions in Title 67. In practical terms, it creates or confirms a tax exemption from privilege taxes for qualifying cooperative subsidiaries, affecting how these entities are classified under state tax law and potentially reducing their tax liability. The act takes effect immediately upon becoming law. The general sentiment around the bill appears strongly favorable. Both House committee votes reported in the bill history were unanimous, with no recorded opposition, suggesting broad agreement that the measure is a technical or policy-supportive clarification for agricultural cooperatives. The bill also passed both chambers and was signed into law as Public Chapter No. 455. The main point of contention, to the extent one exists, is the scope of the exemption: it applies only to subsidiaries that are organized and controlled by agricultural cooperative associations and whose profits benefit those cooperatives. That limitation suggests the legislature was focused on ensuring the tax benefit is tied to agricultural interests rather than extending broadly to unrelated business entities. No specific opposition arguments are reflected in the available committee or vote history.

Impact

The bill amends Tennessee Code Annotated § 43-16-148 and related tax provisions to exclude qualifying subsidiaries of agricultural cooperative associations from being treated as for-profit taxpayers subject to the state privilege tax. This affects agricultural cooperatives, their subsidiary entities, and the state tax administration by clarifying eligibility for exemption and narrowing the tax base for those entities that meet the statute’s control-and-benefit requirements.

Sentiment

The available legislative history indicates a positive and largely noncontroversial reception. The House Finance, Ways, and Means Subcommittee and full Committee both recommended passage unanimously, and the bill ultimately passed and became law. The absence of recorded dissent or debate in the provided materials suggests the measure was viewed as a targeted, pro-agriculture tax clarification rather than a contested policy change.

Contention

No explicit opposition is shown in the provided record, but the bill’s key policy boundary is the definition of which subsidiaries qualify. Support appears to center on protecting agricultural cooperative structures and ensuring profits remain tied to cooperative benefit, while any potential concern would likely involve whether the exemption could be used too broadly by entities only indirectly connected to agriculture. The statute addresses that by limiting the exemption to subsidiaries organized and controlled by agricultural cooperative associations and used for their benefit.