What's Going On (In Tennessee Tax) ... What's Going On (In Tennessee Tax)?

Decoupling ... That's what is going on in Tennessee Tax. Or it's at least what the Legislature is talking about. With the passage of Federal tax reform late last year, one of the main tax questions coming into this legislative session was whether Tennessee would pass legislation in response to the Federal changes.  By doing nothing, the tax base in Tennessee would expand with limitations on federal interest expenses, among other changes. 

Georgia has already made changes to decouple from certain expense/bonus depreciation changes in the Tax Cuts and Jobs Act but is waiting on further guidance from the IRS before it makes any further changes. Tennessee is no stranger to decoupling as it has consistently decoupled from Federal bonus depreciation from prior bills, but it remains to be seen whether Tennessee is content to reap the benefits of the expansion of the Tennessee tax base. 

The Council on State Taxation and the Tennessee Chamber are supporting legislation for Tennessee to follow Georgia's lead on decoupling from some of the recent changes.


Other legislative changes include (1) simplification of F&E filing requirements for taxpayers only liable for the minimum tax and (2) a bill that would change the application of the amusement tax to Crossfit-type training providers.


New litigation involving the application of franchise and excise nexus for Scholastic Book Clubs on the heals of the Courts concluding that Scholastic has nexus for sales and use tax purposes.

Court of Appeals briefing on a case involving the determination of whether a Tennessee-based business is engaged in a multistate business and allowed to apportion its net earnings and net worth for franchise and excise tax purposes.