TN FAE Repeal of Property Tax Base

On April 25, 2024, the Tennessee General Assembly passed HB 1893/SB 2103 repealing the property base component of the Tennessee franchise tax. Historically, the franchise tax base was calculated as the greater of Net Worth (assets minus liabilities) or the net book value of real and tangible property. The passage of this law eliminates the property base calculation and allows for taxpayers that have paid Franchise taxes based on the property tax base for the preceding three years to file a refund claim for the difference between the property tax base assessment and the calculated net worth base.

Affected taxpayers will have from May 15, 2024 to November 30, 2024 to file claims for refunds for returns filed on or after January 1, 2021, for fiscal tax years ending March 31, 2020, or later. Taxpayers claiming the refund will waive the right to file suit regarding the constitutionality of the prior franchise tax law.

Finally, to increase transparency surrounding refund claims, the Tennessee Department of Revenue will publish on its website from May 31, 2025 through June 30, 2025 the name of each claimant and a range of the applicable refund issued. The disclosures will fall into three ranges 1) $750 or less 2) $751-$10,000 and 3) $10,001 and greater.

The Department of Revenue has posted the following information related to the franchise tax property measure (schedule G) refunds:

Franchise Tax Property Measure (Schedule G) Refunds Website

Important Notice #24-05: Franchise Tax Property Measure Repeal

Revenue Help: FT-13: Property Measure Repeal

If you have any questions about how this change affects you, contact your tax adviser or reach out to the Association