Income/Franchise:
Tennessee: More Guidance on Franchise Tax Refunds Under Newly Repealed Alternative Property Base

Newsroom: Claim Period for Franchise Tax Property Measure (Schedule G) Refunds Opens Today, Tenn. Dept. of Rev. (5/15/24). The Tennessee Department of Revenue (Department) posted more refund guidance [see State Tax Matters, Issue 2024-19, for some previously posted guidance on this subject] pursuant to recently enacted legislation that, for tax years ending on or after January 1, 2024, eliminates the Tennessee statutory provision requiring that the franchise tax base must not be less than the actual value of the real or tangible property owned or used by a taxpayer in the State, and which authorizes refunds for taxpayers who properly file a refund claim on the prescribed forms for taxes previously paid using the real and tangible property base measure of the franchise tax [see S.B. 2103 / H.B. 1893 (2024), and previously issued Multistate Tax Alert for more details on this Tennessee law change]. To obtain a refund, eligible taxpayers must “amend their franchise and excise tax returns for all eligible tax periods and file a Claim for Refund of Franchise Tax Paid on Property Measure (Schedule G) form,” and the Department reminds that both the amended returns and the refund claim form must be submitted by November 30, 2024.

The Department also explains that it has sent letters via US Mail to taxpayers who are “potentially eligible for these refunds,” and that regardless of whether a taxpayer receives such a letter, it “encourages taxpayers to review their records and/or consult a tax professional to determine if they qualify for a refund.” Moreover, the Department urges eligible taxpayers to file for these refunds as soon as possible and recommends electronic filing “as it may expedite the process.” Please contact us with any questions.