AN ACT to amend Tennessee Code Annotated, Title 67, relative to tax credits.
Summary
HB2156 amends Tennessee’s tax credit provisions in Title 67 to adjust the credit available for certain loans made to community development financial institutions (CDFIs). The bill changes the annual credit calculation for qualified loans to a CDFI certified by the U.S. Treasury’s Community Development Financial Institutions Fund to 3% of the month-end average unpaid principal balance, and the credit for qualified low-rate loans to 5% of that balance. In both cases, the credit applies for the life of the loan or 15 years, whichever comes first.
The measure is a targeted tax incentive designed to encourage lending to CDFIs, which typically provide financial services and capital in underserved or low-income communities. The act takes effect January 1, 2027, and applies to tax years beginning on or after that date, so its fiscal and administrative effects will begin in future tax years rather than immediately.
Impact
HB2156 narrows and clarifies Tennessee’s existing tax credit framework for loans to certified community development financial institutions by setting specific annual credit percentages and duration limits. It affects taxpayers and financial institutions that make qualified loans, as well as CDFIs that rely on such lending to support community development. The bill does not create a new program, but it modifies the calculation and timing of an existing credit under Tennessee Code Annotated Section 67-4-2109, with implementation delayed until tax years beginning on or after January 1, 2027.
Sentiment
The bill appears to have been broadly supported and moved through the legislative process with strong majorities, including unanimous or near-unanimous committee votes and overwhelming floor approval. The available voting record suggests little opposition overall, indicating general agreement with the policy goal of supporting community development lending through tax incentives. The final enactment and gubernatorial approval further reflect a favorable reception.
Contention
There is little evidence of substantive controversy in the available record. The only notable dissent appears in an early House Government Operations Committee vote, which passed 13-1, suggesting at least one member had reservations, though no transcript is available to identify the specific concern. Given the bill’s focus on tax credits, any potential contention likely centered on fiscal impact, the scope of the incentive, or whether the credit appropriately targets CDFI lending, but the recorded votes show that such concerns did not prevent passage.
AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, Part 20 and Title 67, Chapter 4, Part 21, relative to credits against franchise and excise tax liability.
AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, Part 20 and Title 67, Chapter 4, Part 21, relative to credits against franchise and excise tax liability.