Tennessee Economic Development Incentives

A number of state and local incentives are available to encourage industries to locate in Weakley County. The Weakley County Chamber of Commerce and the Joint Economic and Community Development Board can help form incentive packages for eligible businesses.

Available Financing Incentives include:

Tennessee Industrial Infrastructure Program (TIIP)

These funds are available to local government to be used in providing infrastructure improvements to support new or expanding industries. The improvements that qualify for TIIP include water systems, waste water systems, transportation systems, site improvements and other improvements to physical infrastructure.

Community Development Block Grants (CDBG)

Funds are available to smaller communities (under 50,000 population) to assist with economic development. Grants are available for industrial infrastructure and loans are available for industrial buildings and equipment.

Tennessee Valley Authority (TVA) Economic Development Loan Fund

TVA has established a revolving loan fund to stimulate industrial development in the TVA power service area. Loans are available to new and expanding industrial companies for fixed assets such as buildings, machinery and equipment.

Private Activity Bonds

Weakley County and the municipalities have Industrial Development Boards which are empowered to issue private activity bonds on behalf of qualifying industry.

Small Business Administration 504 Loan Program

The U. S. Small Business Administration’s 504 Direct Loan Program is designed to stimulate job creation and to increase private sector involvement in the financing of long-term fixed assets for small businesses. The funds may be used for land, building or machinery and equipment acquisition, building expansion or renovation and new construction.

Tennessee Tax Incentives:

Corporate Excise Tax

  • Eligible participants receive a 1% excise tax credit for:
    • The purchase, installation and/or repair of qualified industrial machinery
    • The purchase of qualified equipment associated with the required $500,000 capital investment by a distribution or warehouse facility.
    • The purchase of computers, computer networks, software, computer systems, telephone systems and any peripheral devices purchased to reach the “required capital investment” to qualify for the jobs tax credit.
  • Net operating loss may carry forward to 15 years.
  • All capital losses may be claimed in the year incurred.

Franchise Tax

  • Industries can receive a tax credit of $2,000 (or $3,000 in economically distressed counties) per new full-time employee for eligible businesses that meet the requirements of:
    • A minimum of 25 new full-time jobs
    • An additional capital investment of $500,000
    • Offer a minimal health care plan
  • No franchise tax on:
    • Finished goods inventory in excess of $30 million for fiscal year beginning on, or after July 15, 1998
    • Property under construction, not being utilized by corporation
    • Pollution control equipment
  • Property rented from an industrial development board may be capitalized on the corporate books.
  • Tennessee offers a double-weighted sales apportionment formula for franchise and excise tax for companies that increase Tennessee investment while doing business in other states. This means that property, payroll and sales are all taxed, but they are taxed in fourths, not thirds. Property and payroll have one fourth each and sales have two fourths.

Payment In Lieu of Taxes

A Payment in Lieu of Tax lease (PILOT) offers a tax abatement on industrial/commercial property prior to development for a prescribed number of years. This schedule is provided when the title of industrial property and/or personal property is held in the name of an Industrial Development Board. Payment in lieu of taxes will coincide with the lease agreement, or will run in length according to an industrial development bond issue.

Personal Income Tax

There is no state personal income tax on wages or salaries; however, certain dividend and interest income received by a Tennessee resident is taxable.

Property Tax

The tax laws in the state of Tennessee do not require a property tax on the following:

  • Goods-in-process
  • Finished goods inventories in hands of manufacturers
  • Inventories of merchandise for sale, goods-in-transit (Freeport)
  • Pollution control equipment required for compliance with federal, state or local environmental protection laws

Attractive depreciation schedules are available

Sales and Use Tax

No sales tax is required on:

  • Purchases, installation and repairs of qualified machinery
  • Purchases of equipment associated with the required capital investment of $10 million by a distribution or warehouse facility
  • Raw materials for processing
  • Pollution control equipment of manufacturers
  • Manufacturers’ use of energy fuel and water if used directly in the manufacturing process and metered separately
  • Any materials that become a component part of the finished product
  • Containers, labels and packaging materials if they are sold with or accompany the product at no additional charge

Reduced sales tax rates for manufacturers’ use of energy fuel and water

Credit of 5.5% for state and use taxes paid on building materials, machinery and equipment used in new or expanded regional, national or international headquarters. Required investment of $50 million.

Refund taxes paid on goods and services paid by motion picture production companies filming or producing in Tennessee. Requires expenditures of $500,000.