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VideoRefund of Previous TN Franchise Taxes Under New Law
Legislation that recently became law in Tennessee means taxpayers may be eligible for a refund of a portion of franchise taxes they paid for a tax period ending on or after March 31, 2020. To qualify for the credit, refund claims must be filed between May 15, and November 30, 2024.
HB 1893/SB 2103 repeals the “alternative minimum property measure” of the minimum tax base and requires taxpayers to calculate franchise tax using only their apportioned net worth for tax years ending on or after January 1, 2024. The bill that authorizes refunds for franchise tax paid using the alternative minimum property calculation, reduced by the amount of tax that would otherwise be owed under the apportioned net worth calculation.
Key changes include:
- Available refunds: Refunds are available for tax returns filed on or after January 1, 2021 for a tax period that ended on or after March 31, 2020. Claims must be made on a form that the tax commissioner will prescribe solely for the purposes of a refund related to this issue.
- Publication of refunds: The Tennessee Department of Revenue will publish the names of businesses that file for a refund and a range of the amount of the refund requested on its website for 30 days, from May 31, 2025 to June 30, 2025 .
- Claim waiver: Businesses claiming a refund must waive any claim or right to file suit alleging that the Tennessee franchise tax is unconstitutional by failing the “internal consistency test.”
Weaver Can Help
Taxpayers who paid the Tennessee franchise tax under the “alternative minimum property measure” should assess their eligibility to determine whether they qualify for the refund.
Weaver’s State and Local Tax team can help you review your franchise tax calculations to determine eligibility and assist with filing the appropriate claim forms. Contact us for information.
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