by Nathan Hsiao
On Thursday, April 25th, Tennessee legislation passed changes to the franchise tax calculation. Previously, franchise tax was calculated based on one of two methods: net worth or property value, which included the rent factors and net book value of property. The tax law changes enacted remove Schedule G (the property value calculation), leaving net worth as the only viable method to calculate franchise tax. This change is effective for tax years ending on or after January 1, 2024.
For taxpayers who have paid franchise tax in prior years based on the Schedule G calculation using book value of property owed, may be eligible for refunds. In order to claim a refund, eligible taxpayers must file amended returns between May 15th, 2024, and November 30th 2024. Additionally, in order to be eligible for refunds of previously paid franchise tax, the return in question must have been filed on or after January 1, 2021 and must be for tax period that ended on or after March 31, 2020. For most companies, the eligible years for refunds would be tax years 2020 through 2023.
As more information becomes available, we will be sure to update you. In the meantime, please feel free to reach out to your BCS contact for questions and further assistance in this process.
