2010 Tennessee Code
Title 67 - Taxes And Licenses
Chapter 4 - Privilege and Excise Taxes
Part 21 - Franchise Tax Law
67-4-2109 - Credit for gross premiums tax and job tax.

67-4-2109. Credit for gross premiums tax and job tax.

(a)  As used in subsection (b):

     (1)  “Best interests of the state” includes, but is not limited to, a determination by the commissioner of revenue and the commissioner of economic and community development that the capital investment or jobs are a result of the credit provided in this section;

     (2)  (A)  “Enhancement county” means a county that meets one (1) of the following criteria for any month during the twenty-four (24) months immediately prior to the creation of any qualified job for which a job tax credit is sought pursuant to subsection (b), based on monthly statistics from the department of labor and workforce development:

                (i)  The average number of dislocated workers in the county exceeds the average number of dislocated workers in this state; or

                (ii)  The per capita income of the county is less than Tennessee's average per capita income;

          (B)  Notwithstanding subdivision (a)(2)(A), based on an annual evaluation as of July 1 of each year, the commissioner of economic and community development may determine that a county qualifies as an enhancement county if the county experiences substantial characteristics of economic distress, including, but not limited to, major loss of employment, recent high unemployment rates, traditionally low levels of family incomes, high levels of poverty and high concentrations of employment in declining industries;

          (C)  Upon determining that a county qualifies as an enhancement county under subdivision (a)(2)(A) or (a)(2)(B), the department of economic and community development shall designate the county as a tier 1, tier 2, or tier 3 enhancement county based on unemployment, per capita income, and poverty levels of all Tennessee counties using statistical data prepared by any agency of the state or federal government no later than July 1 of each year. A list of all tier 1, tier 2, and tier 3 enhancement counties shall be published annually by the department of economic and community development;

     (3)  “Industrial wage job” means a qualified job with wages equal to or greater than the state's average occupational wage, as defined in § 67-4-2004, for the month of January of the year during which the job was created;

     (4)  “Investment period” means the period during which qualified jobs are created as a result of the required capital investment; provided, however, that the period shall not exceed three (3) years from the effective date of the business plan;

     (5)  “Qualified business enterprise” means an enterprise:

          (A)  In which the business has made the required capital investment necessary to permit the creation or expansion of manufacturing, warehousing and distribution, processing tangible personal property, research and development, computer services, call centers, headquarters facilities, as defined in § 67-6-224(b), or convention or trade show facilities;

          (B)  In which the business has made the required capital investment necessary to permit the creation or expansion of a repair service facility primarily engaged in providing repairs for aircraft owned by unrelated commercial, governmental or foreign persons; or

          (C)  That promotes high-skill, high-wage jobs in high-technology areas, emerging occupations or skilled manufacturing jobs in which the business has made the required capital investment in an enhancement county necessary to permit an increase in the number of qualified jobs in that county and that receives an approval from the commissioner of revenue and the commissioner of economic and community development in a manner prescribed by the department of revenue;

     (6)  “Qualified job” means a job that meets all of the following criteria:

          (A)  The job position is a permanent, rather than seasonal or part-time, employment position providing employment in a qualified business enterprise for at least twelve (12) consecutive months to a person for at least thirty-seven and one half (37 1/2) hours per week with minimum health care, as described in title 56, chapter 7, part 22;

          (B)  The job position is newly created in this state and, for at least ninety (90) days prior to being filled by the taxpayer, did not exist in this state as a job position of the taxpayer or of another business entity;

          (C)  The job position is filled; provided, however, that a position will be deemed filled if it subsequently becomes vacant but is refilled within a period of not more than ninety (90) days; and

          (D)  The job position is filled prior to January 1, 2016; and

     (7)  “Required capital investment”, except for convention or trade show enterprises, means an investment of five hundred thousand dollars ($500,000) in real property, tangible personal property or computer software owned or leased in this state valued in accordance with generally accepted accounting principles. For businesses engaged in convention or trade show enterprises, “required capital investment” means an investment of ten million dollars ($10,000,000) in such property in the same manner described for other enterprises. A capital investment shall be deemed to have been made as of the date of payment or the date the business enterprise enters into a legally binding commitment or contract for purchase or construction.

(b)  (1)  Job Tax Credit; General Provisions. 

          (A)  Subject to the requirements set forth in this subsection (b), there shall be allowed to any qualified business enterprise that makes the required capital investment a credit equal to four thousand five hundred dollars ($4,500) for each qualified job created during the investment period.

          (B)  The qualified business enterprise shall file a business plan with the commissioner in order to qualify for the credit provided by this subsection (b). The business plan shall be filed in a manner prescribed by the commissioner and shall describe the investment to be made, the number of jobs the investment will create, the expected dates the jobs will be filled and the effective date of the plan.

          (C)  In order to qualify for the credit, the qualified business enterprise must, within twelve (12) months of the effective date of the business plan, make the required capital investment and create at least twenty-five (25) qualified jobs.

          (D)  The credit shall apply against the franchise tax imposed by this part and the excise tax imposed by part 20 of this chapter; provided, however, that the credit, together with any carry-forward thereof, taken on any franchise and excise tax return shall not exceed fifty percent (50%) of the combined franchise and excise tax liability shown on the return before any credit is taken. Any unused credit may be carried forward in any tax period until the credit is taken; provided, however, that the credit may not be carried forward for more than fifteen (15) years.

          (E)  The commissioner of revenue has the authority to conduct audits or require the filing of additional information necessary to substantiate or adjust the findings contained within the business plan and to determine that the business enterprise has complied with all statutory requirements so as to be entitled to the credit.

          (F)  Nothing in this subsection (b) shall require that the taxpayer establish its commercial domicile in this state in order to receive the credit provided in this subsection (b).

     (2)  Job Tax Credit; Additional Annual Credit.  In addition to the credit allowed in subdivision (b)(1), the following tax credit shall be allowed in the circumstances described; provided, that the taxpayer otherwise meets all of the requirements of subdivision (b)(1):

          (A)  If the qualified business enterprise is located in a tier 2 or tier 3 enhancement county, an annual credit shall be allowed as follows:

                (i)  If the qualified business enterprise is located in a tier 2 enhancement county, the additional annual credit shall be allowed for a period of three (3) years beginning with the first tax year after the initial job tax credit is created;

                (ii)  If the qualified business enterprise is located in a tier 3 enhancement county, the additional annual credit shall be allowed for a period of five (5) years beginning with the first tax year after the initial job tax credit is created;

                (iii)  The additional annual credit shall equal four thousand five hundred dollars ($4,500) for each qualified job; provided, that the job remains filled by employees during the year in which the credit is being taken. This annual credit may be used to offset up to one hundred percent (100%) of the taxpayer's franchise and excise tax liability for that year. Any unused annual credit, however, shall not be carried forward beyond the year in which the credit originated;

          (B)  If the qualified business enterprise involves a higher level of investment and job creation, as specifically described in subdivisions (b)(2)(B)(i)-(v), an annual credit shall be allowed as follows:

                (i)  If the investment exceeds one billion dollars ($1,000,000,000) and at least five hundred (500) industrial wage jobs are created, the additional annual credit shall be allowed for a period of twenty (20) years beginning with the first tax year after the initial job tax credit is created;

                (ii)  If the investment exceeds five hundred million dollars ($500,000,000) and at least five hundred (500) industrial wage jobs are created, the additional annual credit shall be allowed for a period of twelve (12) years beginning with the first tax year after the initial job tax credit is created;

                (iii)  If the investment exceeds two hundred fifty million dollars ($250,000,000) and at least two hundred fifty (250) industrial wage jobs are created, the additional annual credit shall be allowed for a period of six (6) years beginning with the first tax year after the initial job tax credit is created. An integrated supplier, as defined in § 67-4-2004, shall qualify for the credit provided in this subdivision (b)(2)(B)(iii), regardless of the level of its capital investment or the number of jobs created;

                (iv)  If the investment exceeds one hundred million dollars ($100,000,000) and at least one hundred (100) industrial wage jobs are created, the additional annual credit shall be allowed for a period of three (3) years beginning with the first tax year after the initial job tax credit is created;

                (v)  If the investment exceeds ten million dollars ($10,000,000) and at least one hundred (100) qualified jobs are created that also meet the definition of headquarters staff employees under § 67-6-224 and pay at least one hundred fifty percent (150%) of the state's average occupational wage for the month of January of the year in which the jobs are created, the additional annual credit shall be allowed for a period of three (3) years beginning with the first tax year after the initial job tax credit is created;

                (vi)  The additional annual credit shall equal five thousand dollars ($5,000) for each job specifically described in subdivisions (b)(2)(B)(i) through (b)(2)(B)(v); provided, that the jobs remain filled during the year in which the credit is being taken. This annual credit may be used to offset up to one hundred percent (100%) of the taxpayer's franchise and excise tax liability for that year. Any unused annual credit, however, shall not be carried forward beyond the year in which the credit originated;

                (vii)  The taxpayer shall be allowed a period not to exceed three (3) years from the effective date of the business plan in order to make the required capital investment necessary to qualify for the additional annual credit allowed under this subdivision (b)(2)(B). If determined to be in the best interests of the state, the three-year period for making the required investment may be extended by the commissioner of economic and community development for a reasonable period not to exceed two (2) additional years, or four (4) additional years if the investment exceeds one billion dollars ($1,000,000,000).

     (3)  Job Tax Credit; Special provisions.   This subdivision (b)(3) shall serve as exceptions to subdivisions (b)(1) and (2). To the extent a conflict exists between this subdivision (b)(3) and subdivision (b)(1) or (b)(2), this subdivision (b)(3) shall control. Otherwise, subdivisions (b)(1) and (2) shall apply to any credits provided under this subsection (b):

          (A)  The job tax credit allowed in subdivision (b)(1) shall be increased from four thousand five hundred dollars ($4,500) to five thousand dollars ($5,000) if the qualified business enterprise qualifies for the additional annual credit allowed in subdivision (b)(2)(B);

          (B)  If determined to be in the best interests of the state, the commissioner is authorized to allow the credit to a qualified business enterprise that is located in an enhancement county upon the creation of less than twenty-five (25) qualified jobs. The commissioner of revenue and the commissioner of economic and community development shall determine the number of qualified jobs necessary for the taxpayer to receive the credit;

          (C)  If the qualified business enterprise is located in a tier 2 enhancement county, the taxpayer shall have three (3) years in order to create the minimum number of qualified jobs necessary to receive the credit. If the qualified business enterprise is located in a tier 3 enhancement county, the taxpayer shall have five (5) years to create the minimum number of qualified jobs necessary to receive the credit;

          (D)  If the required capital investment exceeds one billion dollars ($1,000,000,000), the time limitations otherwise applicable to the carry-forward of unused job tax credits under subdivision (b)(1)(D) and subdivision (b)(2)(B)(vi) shall not apply, and any unused credit may be carried forward until fully utilized, if the commissioner of revenue and the commissioner of economic and community development have determined that the allowance of the additional carry-forward is in the best interests of the state;

          (E)  The commissioner of revenue, with the approval of the commissioner of economic and community development, is authorized to approve job tax credit in cases where the newly created position existed in this state as a job position of the taxpayer or of another business entity less than ninety (90) days prior to being filled by the taxpayer; provided, that all other requirements to obtain the credit have been satisfied by the taxpayer; and provided, further, that the commissioner of revenue and the commissioner of economic and community development have determined that allowance of the credit is in the best interests of the state;

          (F)  A taxpayer that has established its international, national or regional headquarters in this state and has met the requirements to qualify for the credit provided in § 67-6-224, or a taxpayer that has established an international, national or regional warehousing or distribution hub in this state and has met the requirements to be a qualified new or expanded warehouse or distribution facility, shall be allowed to offset up to one hundred percent (100%) of its franchise or excise, or both, tax liability by job tax credits earned and not expended as of June 1, 2006, or any carry-forward of the job tax credits, if the commissioner of revenue and the commissioner of economic and community development determine that increasing the percentage of offset permitted to the taxpayer is in the best interests of the state. The commissioner of revenue and the commissioner of economic and community development shall determine the percentage of franchise or excise, or both, tax liability allowed to be offset by this subdivision (b)(3)(F) that otherwise allowed by subdivision (b)(1) and the period during which the increased offset shall continue;

          (G)  The credits otherwise provided in this subsection (b) shall be allowed for new high-skill, high-wage, qualified jobs in high-technology areas, emerging occupations or skilled manufacturing, regardless of whether net employment is increased; provided, however, that this subdivision (b)(3)(G) shall apply only to new jobs created by a taxpayer who failed to meet the net increase requirement due to worker layoffs or reductions, where such workers have been certified by the federal department of labor's division of trade adjustment assistance as having been adversely affected by foreign trade, so as to be eligible for assistance in accordance with the federal Trade Adjustment Assistance Reform Act of 2002. A taxpayer seeking qualification for jobs tax credits under this subsection (b) shall be required to satisfy all other requirements of this subsection (b), and shall be required to provide evidence to the commissioner of revenue of the department of labor's certification of eligibility for assistance for the taxpayer's adversely affected worker group;

          (H)  The credits provided by this subsection (b) may be computed by a general partnership that establishes and operates a call center in Tennessee that is placed in service by the general partnership on or after June 30, 2003, and that would otherwise qualify for the job tax credit provided in this subsection (b); provided, that the credit shall first apply in the tax year in which the qualified business enterprise increases net full-time employment by four hundred (400) or more jobs, and shall then apply in those subsequent fiscal years in which further net increases occur above the level of employment established when the credit was last taken. The credit provided in this subsection (b) may also be computed by a general partnership that has established an international, national or regional headquarters in this state that meets the definition of a qualified headquarters facility under § 67-6-224 and would otherwise qualify for the job tax credits provided in this subsection (b). The amount of the credit shall be computed under the provisions of this subsection (b) as if the general partnership were subject to franchise and excise tax under parts 20 of this chapter and this part. With respect to the general partnership tax year during which a credit is so computed, a partner in the general partnership that is subject to Tennessee franchise and excise tax and that directly holds a first tier ownership interest in the general partnership may take a percentage of the credit that equals the total amount of the credit for the general partnership multiplied by the partner's percentage interest in the general partnership on the last day of the general partnership tax year against the partner's franchise and excise tax liability for the partner's tax year that includes the last day. The job tax credit passed through from the general partnership to the first tier partner under this subsection (b) shall, in the hands of the first tier partner, be subject to applicable provisions and limitations otherwise provided by this subsection (b), including carry-forward provisions; provided, that in no case shall the credit or a carryover thereof be taken by a business entity, unless it was a partner in the general partnership and subject to franchise and excise tax at the time the credit was earned by the general partnership.

(c)  In accordance with § 56-4-217, there shall be credited upon the tax imposed by this part the net amount of gross premiums tax paid that is measured by a period that corresponds to the franchise tax period on which the return is based, plus any amount used to offset payment to the Tennessee guaranty association that has not otherwise been recovered, but not including the gross premiums receipts tax paid by fire insurance companies for the purpose of executing the fire marshal law.

(d)  When an audit of a tax return for any year not barred by the statute of limitations discloses a change in the amount of tax due, there may be applied upon it as a credit any amount that the taxpayer is otherwise entitled to receive either as a credit under parts 4-6 of this chapter for franchise taxes paid, or as a refund thereof under § 67-1-707. This tax credit allowance may be applied, notwithstanding the statute of limitations or the requirement for approval of certain refunds by the commissioner and the attorney general and reporter, if such was made under § 67-1-707, and also any statutory or regulatory requirement under various sections of parts 4-6 of this chapter that the franchise tax be paid prior to the allowance of any credit.

(e)  (1)  Each taxpayer is considered a separate entity; therefore, in the case of mergers, consolidations, and like transactions, no tax credit incurred by the predecessor taxpayer shall be allowed as a deduction on the tax return filed by the successor taxpayer. With the exception set forth in subdivision (e)(2), a credit carryforward may be taken only by the taxpayer that generated it.

     (2)  Notwithstanding the provisions contained in subdivision (e)(1), when a taxpayer merges out of existence and into a successor taxpayer that has no income, expenses, assets, liabilities, equity or net worth, any qualified Tennessee credit carryover of the predecessor that merged out of existence shall be available for carryover on the return of the surviving successor; provided, that the time limitations for the carryover have not expired.

     (3)  A unitary group of financial institutions may take any qualified credit that was generated by any group member that is in existence as a member of the group at the end of the group's tax year; provided, that such credit has not previously been taken by the member itself before it joined the group or by another unitary group of financial institutions at the time the financial institution generating the credit was a member of that group; and provided further, that the credit carryover shall be subject to the limitations set forth in this subsection (e).

(f)  [Deleted by 2008 amendment.]

(g)  (1)  As used in this subsection (g), unless the context otherwise requires:

          (A)  “Full-time employee job” means a permanent, rather than seasonal or part-time, employment position, providing employment for at least twelve (12) consecutive months, to a person for at least thirty-seven and one half (37.5) hours per week, if that person is enrolled in minimal health care benefits, as described in title 56, chapter 7, part 22; and

          (B)  “Part-time employee job” means a part-time employment position, providing employment for at least twelve (12) consecutive months, to a person for at least ten (10) hours per week.

     (2)  A job tax credit of five thousand dollars ($5,000) for each net new full-time employee job, and two thousand dollars ($2,000) for each net new part-time employee job, for a person with disabilities who is receiving state services directly related to such disabilities, shall be allowed against a taxpayer's franchise and excise liability tax for that year; provided, that:

          (A)  The employment of such individual creates a net increase in the number of persons with disabilities employed by the taxpayer within the ninety-day period immediately preceding the employment;

          (B)  The taxpayer provides such employment for at least twelve (12) consecutive months and for no less than the minimal hours per week; and for employees enrolled in the minimal health care benefits described in subdivision (g)(1), for respective full-time employment jobs and part-time employment jobs;

          (C)  The credit allowed by this subdivision (g)(2) for the employment of persons with disabilities shall first apply in the tax year in which the taxpayer increases net new employment of such persons by one (1) or more, and in those subsequent fiscal years in which further net increases occur above the level of such employment established when the credit was last taken;

          (D)  The taxpayer is not required to make a capital investment in a qualified business enterprise in order to receive the credit allowed by this subdivision (g)(2) for the employment of persons with disabilities; and

          (E)  The credit provided by this subdivision (g)(2) may be granted only to taxpayers who participate in an existing employment incentive program, pursuant to which persons with disabilities are being served by the department of health, the department of mental health and developmental disabilities, the division of rehabilitation services of the department of human services, the department of finance and administration, the division of intellectual disabilities services of the department of finance and administration, the Tennessee committee for the employment of persons with disabilities, or any other similar state employment incentive program. The commissioner of finance and administration shall certify to the commissioner of revenue a taxpayer's participation in one (1) of these programs, that program's fiscal capacity to serve the taxpayer or the taxpayer's employees, and the number of persons employed by the taxpayer meeting the criteria established by this subsection (g).

     (3)  The taxpayer shall file a plan with the commissioner of revenue, on a form prescribed by the commissioner, in order to qualify for the credit. The form shall be filed on or before the last day of the fiscal year in which the employment begins, and shall state the number of persons with disabilities newly employed.

     (4)  The commissioner of revenue has the authority to conduct audits or require the filing of additional information necessary to substantiate or adjust the amount of credit allowed by this subsection (g), and to determine that the taxpayer has complied with all statutory requirements so as to be entitled to the job tax credit.

     (5)  The provision of subdivisions (c)(2)(F) and (G), relating to the carryforward of any unused job tax credit, shall apply to the credit allowed by this subsection (g).

(h)  (1)  For purposes of this subsection (h), “headquarters facility,” “headquarters staff employees,” “investment period,” “new full-time employee job,” “qualified headquarters facility,” and “qualified headquarters facility relocation expenses” shall have the same meanings as defined in § 67-6-224.

     (2)  In addition to the job tax credit provided in subsection (c), there is allowed a credit against a taxpayer's franchise and excise tax liability equal to any qualified headquarters facility relocation expenses incurred by the taxpayer during the investment period for establishing a qualified headquarters facility; provided, that the taxpayer meets one (1) of the following criteria:

          (A)  The taxpayer creates at least one hundred (100) but less than two hundred fifty (250) net new full-time employee jobs that pay at least one hundred fifty percent (150%) of this state's average occupational wage;

          (B)  The taxpayer creates at least two hundred fifty (250) but less than five hundred (500) net new full-time employee jobs that pay at least one hundred fifty percent (150%) of this state's average occupational wage;

          (C)  The taxpayer creates at least five hundred (500) but less than seven hundred fifty (750) net new full-time employee jobs that pay at least one hundred fifty percent (150%) of this state's average occupational wage;

          (D)  The taxpayer creates at least seven hundred fifty (750) net new full-time employee jobs that pay at least one hundred fifty percent (150%) of this state's average occupational wage; or

          (E)  The taxpayer creates at least five hundred (500) net new full-time employee jobs in connection with a capital investment in excess of one billion dollars ($1,000,000,000).

     (3)  Notwithstanding any law to the contrary, the total credit allowed to a taxpayer under this subsection (h) shall not exceed the appropriate dollar amount listed in one (1) of the following subdivisions (h)(3)(A)-(E), multiplied by the number of headquarters staff employee positions relocated by the taxpayer to the qualified headquarters facility during the investment period:

          (A)  For a taxpayer meeting the requirements in subdivision (h)(2)(A), ten thousand dollars ($10,000);

          (B)  For a taxpayer meeting the requirements in subdivision (h)(2)(B), twenty thousand dollars ($20,000);

          (C)  For a taxpayer meeting the requirements in subdivision (h)(2)(C), thirty thousand dollars ($30,000);

          (D)  For a taxpayer meeting the requirements in subdivision (h)(2)(D), forty thousand dollars ($40,000); and

          (E)  For a taxpayer meeting the requirement in subdivision (h)(2)(E), one hundred thousand dollars ($100,000).

     (4)  To the extent any amount allowed as a credit under this subsection (h) exceeds the combined tax imposed by this part and by part 20 of this chapter, the amount of such excess shall be considered an overpayment and shall be refunded to the taxpayer. Such refund shall be subject to the procedures of § 67-1-1802; provided, however, notwithstanding any procedure of § 67-1-1802 to the contrary, that a claim for refund must be filed with the commissioner within three (3) years from December 31 of the year in which the qualified headquarters facility relocation expense was incurred.

     (5)  If the qualified headquarters facility is not utilized as a headquarters facility for a period of at least ten (10) years, beginning from the date of substantial completion of the qualified headquarters facility, the taxpayer shall be subject to an assessment of tax, plus applicable interest, calculated in accordance with this subdivision (h)(5). The amount of tax assessed under this subdivision (h)(5) shall equal the total credit or refund, or both, taken pursuant to this subsection (h) multiplied by a fraction, the numerator of which is the number of years the facility is not utilized as a headquarters facility and the denominator of which is ten (10). The amount of interest shall be calculated in accordance with § 67-1-801 from the date the facility is no longer utilized as a headquarters facility until the date paid.

     (6)  If the headquarters staff employee position does not remain filled in Tennessee for a period of at least five (5) years, beginning from the date such employee position was initially filled in Tennessee, the taxpayer shall be subject to an assessment of the total amount of credit or refund taken relating to such employee position pursuant to this subsection (h) plus interest.

     (7)  Nothing in this subsection (h) shall require that the taxpayer establish its commercial domicile in this state in order to receive the credit provided in this subsection (h).

     (8)  The credit provided for by this subsection (h) may be computed by a general partnership that has established an international, national or regional headquarters in this state that meets the definition of a qualified headquarters facility under § 67-6-224 and has qualified for the job tax credit provided for in subsection (c). The amount of the credit shall be allowed under this section as if the general partnership were subject to franchise and excise tax under part 20 and this chapter and this part. With respect to the general partnership tax year during which a credit is so computed, a partner in the general partnership that is subject to this state's franchise and excise tax and that directly holds a first tier ownership interest in the general partnership may take a percentage of the credit that equals the total amount of the credit for the general partnership multiplied by the partner's percentage interest in the general partnership on the last day of the general partnership tax year against the partner's franchise and excise tax liability for the partner's tax year that includes the last day. The relocation expense credit passed through from the general partnership to the first tier partner under this section shall, in the hands of the first tier partner, be subject to applicable provisions and limitations otherwise provided by this section. In no case shall the credit be taken by a business entity unless it was a partner in the general partnership and subject to franchise and excise tax at the time the credit was earned by the general partnership.

(i)  (1)  There shall be allowed, for any financial institution, a credit against the sum total of the taxes imposed by the Franchise Tax Law, compiled in this part, and by the Excise Tax Law, compiled in part 20 of this chapter, an amount equal to either:

          (A)  Five percent (5%) of a qualified loan or qualified long-term investment made to an eligible housing entity for any eligible activity; or

          (B)  Three percent (3%) annually of the unpaid principal balance of a qualified loan made to an eligible housing entity for any eligible activity as of December 31 of each year for the life of the loan or fifteen (15) years, whichever is earlier.

     (2)  There shall be allowed, for any financial institution, a credit against the sum total of the taxes imposed by the Franchise Tax Law, compiled in this part, and by the Excise Tax Law, compiled in part 20 of this chapter, an amount equal to either:

          (A)  Ten percent (10%) of a grant, contribution, or qualified low-rate loan made to an eligible housing entity for any eligible activity; or

          (B)  Five percent (5%) annually of the unpaid principal balance of a qualified low-rate loan made to an eligible housing entity for any eligible activity as of December 31 of each year for the life of the loan or fifteen (15) years, whichever is earlier.

     (3)  For purposes of this subsection (i), the following definitions shall apply:

          (A)  “Eligible activity” means an activity that creates or preserves affordable housing for low-income Tennesseans, an activity to help low-income Tennesseans obtain safe and affordable housing, an activity that builds the capacity of an eligible nonprofit to provide housing opportunities to low-income Tennesseans, and any other activities approved by the executive director of the Tennessee housing development agency and the commissioner of revenue;

          (B)  “Eligible housing entity” means a Tennessee nonprofit corporation with an Internal Revenue Code § 501(c)(3) status, the Tennessee housing development agency, a public housing authority, or a development district;

          (C)  “Financial institution” has the definition as provided in § 67-4-2004;

          (D)  “Low-income” means any individual or family at or below eighty percent (80%) of the applicable area median family income as determined by family size;

          (E)  “Qualified loan” means a loan that is at least two percent (2%) below the prime rate, as published by the Wall Street Journal at the time the loan is approved, that does not qualify as a qualified low-rate loan;

          (F)  “Qualified long-term investment” means an equity investment made for a period of more than five (5) years to an eligible housing entity; and

          (G)  “Qualified low-rate loan” means a loan that is at least four percent (4%) below the prime rate, as published by the Wall Street Journal at the time the loan is approved.

     (4)  In order to take the credit, the regulated financial institution must maintain a certification from the Tennessee housing development agency establishing entitlement to the credit.

     (5)  The eligible housing entity receiving the funds must maintain such records as required by the Tennessee housing development agency, to ensure that affordable housing opportunities are being provided.

     (6)  The department of revenue is authorized to share with the Tennessee housing development agency information necessary to effectuate the purposes of this subsection (i). The Tennessee housing development agency shall be bound by restrictions on disclosure of such information otherwise applicable to the department of revenue.

     (7)  The commissioner of revenue and the executive director of the Tennessee housing development agency are authorized to promulgate rules and regulations to effectuate the purposes of this subsection (i). All such rules and regulations shall be promulgated in accordance with the provisions of the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

     (8)  Any unused credit allowed under subdivision (i)(1)(A) or (i)(2)(A) may be carried forward for fifteen (15) years after the tax year in which the credit originated. Any unused credit allowed under subdivision (i)(1)(B) or (i)(2)(B) shall not be carried forward beyond the tax year in which the credit originated.

(j)  A taxpayer that has established its international, national, or regional headquarters in this state and has met the requirements to qualify for the credit provided in § 67-6-224 shall be allowed a credit against the franchise tax imposed under this part equal to the rate of tax imposed under § 67-4-2007 multiplied by any net operating loss incurred by the taxpayer during the tax year covered by the return, or properly carried over from a pervious tax year, in accordance with the provisions of § 67-4-2006; provided, that the credit allowed in this subsection (j) shall only be available if the taxpayer is unable to use the loss or loss carryover to offset net income during the current tax year for excise tax purposes. If a net operating loss or loss carryover is used to calculate a credit under this subsection (j), it shall no longer be available as a deduction for excise tax purposes, and under no circumstances shall the same net operating loss be used for both franchise and excise tax purposes. The credit in this subsection (j) shall only be available upon a determination by the commissioner of revenue and the commissioner of economic and community development that the utilization of net operating losses or loss carryovers against the taxpayer's franchise tax liability is in the best interests of the state. For purposes of this subsection (j), “best interests of the state” includes, but is not limited to, a determination that the taxpayer established its headquarters in this state or converted a regional headquarters in this state into its national or international headquarters as a result of such action. The commissioner of revenue and the commissioner of economic and community development shall determine the period during which the credit provided by this subsection (j) shall be allowed to the taxpayer.

(k)  (1)  For purposes of this subsection (k):

          (A)  “Qualified expenses” means those expenses incurred in this state prior to July 1, 2012, that are necessary for the production of a movie or episodic television program in this state; provided, however, that the expenses shall not qualify under this subdivision (k)(1)(A) unless both the commissioner of revenue and the commissioner of economic and community development determine, in their sole discretion, that the production and the allowance of the credit are in the best interests of this state. For purposes of this subdivision (k)(1)(A), “best interests of this state” means a determination by the commissioner of revenue and the commissioner of economic and community development that the production is a result of the credit provided in this subsection (k) and that the production is not found to be obscene as defined in § 39-17-901;

          (B)  “Qualified investor” means any entity that has established a headquarters facility as defined in § 67-6-224 that has invested in a qualified production company; and

          (C)  “Qualified production company” means any entity that incurs at least one million dollars ($1,000,000) in qualified expenses.

     (2)  A refund in an amount equal to fifteen percent (15%) of any qualified expenses shall be allowed to any qualified production company that has established a headquarters facility as defined in § 67-6-224. If the qualified production company does not have a headquarters facility as defined in § 67-6-224, then any qualified investor shall be allowed a refund equal to the amount of refund that the qualified production company would have been entitled to had it established a headquarters facility as defined in § 67-6-224, multiplied by the qualified investor's percentage ownership interest in the qualified production company.

     (3)  In order for either a qualified production company or a qualified investor to become entitled to a refund, the qualified production company must submit documentation verifying the qualified expenses.

     (4)  The commissioner shall review the documentation and notify the qualified production company of the approved amount.

     (5)  Once the qualified production company has been notified of the approved amount, either the qualified production company or the qualified investment company, as appropriate, may submit a claim for refund. The refund shall be subject to the procedures of § 67-1-1802; provided, however, notwithstanding any procedure of § 67-1-1802 to the contrary, that a claim for refund shall be filed with the commissioner within three (3) years from December 31 of the year in which the qualified expenses were incurred. In no case shall a refund for the same qualified expenses be allowed twice.

(l)  (1)  There shall be allowed, for any financial institution, a credit against the sum total of the taxes imposed by the Franchise Tax law, compiled in this part, and by the Excise Tax law, compiled in part 20 of this chapter, an amount equal to either:

          (A)  Five percent (5%) of a qualified loan or qualified long-term investment made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund; or

          (B)  Three percent (3%) annually of the unpaid principal balance of a qualified loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund as of December 31 of each year for the life of the loan or fifteen (15) years, whichever is earlier.

     (2)  There shall be allowed, for any financial institution, a credit against the sum total of the taxes imposed by the Franchise Tax law, compiled in this part, and by the Excise Tax law, compiled in part 20 of this chapter, an amount equal to either:

          (A)  Ten percent (10%) of a grant, contribution, or qualified low-rate loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund; or

          (B)  Five percent (5%) annually of the unpaid principal balance of a qualified low-rate loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund as of December 31 of each year for the life of the loan or fifteen (15) years, whichever is earlier.

     (3)  For purposes of this subsection (l ):

          (A)  “Financial institution” has the same meaning as defined in § 67-4-2004;

          (B)  “Qualified loan” means a loan that is at least two percent (2%) below the prime rate, as published by the Wall Street Journal at the time the loan is approved, that does not qualify as a qualified low-rate loan;

          (C)  “Qualified long-term investment” means an equity investment made for a period of more than five (5) years; and

          (D)  “Qualified low-rate loan” means a loan that is at least four percent (4%) below the prime rate, as published by the Wall Street Journal at the time the loan is approved.

     (4)  Any unused credit allowed under subdivision (l )(1)(A) or (l )(2)(A) may be carried forward for fifteen (15) years after the tax year in which the credit originated. Any unused credit allowed under subdivision (l )(1)(B) or (l )(2)(B) shall not be carried forward beyond the tax year in which the credit originated.

(m)  (1)  There shall be allowed, for any financial institution, a credit against the sum total of the taxes imposed by the Franchise Tax Law, compiled in this part, and the Excise Tax Law, compiled in part 20 of this chapter, in an amount equal to ten percent (10%) of the financial institution's contribution to the Tennessee rural opportunity fund. The credit provided in this subsection (m) shall be allowed each year for a period of ten (10) years, beginning with the tax year in which the contribution is made. Any unused credit allowed under this subsection (m) shall not be carried forward beyond the tax year in which the credit originated.

     (2)  For purposes of this subsection (m), the loaning of funds by the taxpayer to the Tennessee rural opportunity fund shall constitute a contribution by the taxpayer to the Tennessee rural opportunity fund. If, however, at the close of the tenth year of the period during which the credit is allowed, the taxpayer or its assignee has received repayment, or retains any right to repayment, of all or any portion of the amount contributed to the Tennessee rural opportunity fund or any interest accrued thereon, the department shall be entitled to recapture the credit allowed by increasing the franchise tax liability or the excise tax liability, or both, of the taxpayer by the credit recapture amount for the first tax year following the ten-year period during which the credit is allowed. The credit recapture amount shall be equal to the total amount of credit allowed, plus interest at the rate determined under § 67-1-801 from the date the credit was offset against the taxpayer's franchise tax liability or the excise tax liability, or both.

(n)  (1)  As used in this subsection (n):

          (A)  “Carbon charge” means a tax or fee imposed or levied by the federal or state government, the purpose of which is to reduce the emission of greenhouse gases. “Carbon charge” may include, but is not limited to, a tax, emission fee or charge, or required purchase of carbon or emission off-sets or credits, whether incurred by or imposed directly on the certified green energy supply chain manufacturer or campus affiliate or imposed on the Tennessee Valley authority or other applicable energy provider and billed to the certified green energy supply chain manufacturer or campus affiliate;

          (B)  “Certified green energy supply chain manufacturer” means any manufacturer that has made, during the investment period, a required capital investment in excess of two hundred fifty million dollars ($250,000,000) in constructing, expanding or remodeling a facility that is certified by the commissioner of revenue, the commissioner of economic and community development and the commissioner of environment and conservation, in their sole discretion, to be a facility engaged in manufacturing a product that is necessary for the production of green energy;

          (C)  “Charge for electricity sold” means the total delivered cost of electricity sold to the certified green energy supply chain manufacturer or campus affiliate at the point of delivery to the facility. The charge for electricity sold shall be the total amount due as shown on the customer's electricity bills over the applicable tax year. Any carbon charge shall be excluded from the charge for electricity sold to the extent the carbon charge is included in the credit allowed in subdivision (n)(4);

          (D)  “Investment period” means a period not to exceed three (3) years from the filing of the business plan related to qualification as a certified green energy supply chain manufacturer, during which the required capital investment must be made; and

          (E)  “Maximum certified rate” means a rate expressed as a price per kilowatt hour for calculating the green energy tax credit allowed in subdivision (n)(3) and shall be established through the issuance of a private letter ruling by the commissioner of revenue, which shall be subject to approval by the commissioner of economic and community development and the commissioner of finance and administration and any such maximum certified rate established for a green energy supply chain manufacturer shall apply to any campus affiliate.

     (2)  The credits provided in this subsection (n) and any other applicable credits, net operating losses or carry-forwards thereof provided and in part 20 of this chapter and this part shall be applied in the following order:

          (A)  Any credits, net operating losses or carry-forwards thereof available to the certified green energy supply chain manufacturer, campus affiliate, integrated customer or integrated supplier pursuant to this part or part 20 of this chapter, except for those contained in this subsection (n), shall be applied to the taxpayer's tax liability first;

          (B)  Any green energy tax credit available pursuant to subdivision (n)(3) shall be applied to the taxpayer's liability second and shall be refundable as provided in subdivision (n)(3) if the credit exceeds the taxpayer's remaining liability; and

          (C)  Any carbon tax credit available pursuant to subdivision (n)(4) shall be applied to the taxpayer's liability third and shall be refundable as provided in subdivision (n)(4) if the credit exceeds the taxpayer's remaining liability.

     (3)  A certified green energy supply chain manufacturer and campus affiliate, integrated customer or integrated supplier of a green energy supply chain manufacturer shall be allowed a green energy tax credit against the sum total of the taxes imposed by the Franchise Tax Law compiled in this part and the Excise Tax Law compiled in part 20 of this chapter, equal to the amount by which the charge for electricity sold to the certified green energy supply chain manufacturer, campus affiliate, integrated customer or integrated supplier exceeds the charge that would have been made for such total delivered electricity if the maximum certified rate had been applied during the applicable tax year. The Tennessee Valley authority, or the applicable energy provider, shall supply such information as deemed necessary by the commissioner of revenue to verify the amount of the credit. Consistent with subdivision (n)(2), to the extent that any amount allowed as a credit under this subdivision (n)(3), for any tax year, exceeds the combined tax imposed by part 20 of this chapter and this part after the application of all available credits other than the credit provided in subdivision (n)(4), the amount of the excess shall be considered an overpayment and shall be refunded to the taxpayer; provided, however, that the overpayment and the refund shall not exceed, for any one (1) tax year, an amount equal to one million five hundred thousand dollars ($1,500,000) for each two hundred fifty million dollars ($250,000,000) in capital investments made by the certified green energy supply chain manufacturer. The refund shall be subject to the procedures of § 67-1-1802; provided, however, that, notwithstanding any procedure of § 67-1-1802 to the contrary, a claim for refund must be filed with the commissioner within three (3) years from December 31 of the year in which the credit provided by this subdivision (n)(3) was incurred. To the extent any amount allowed as a credit under this subdivision (n)(3) is not applied to the taxpayer's liability and is not received by the taxpayer as a refund, the credit may be carried forward in perpetuity until it is claimed as a refund or utilized as a credit by the certified green energy supply chain manufacturer pursuant to this subdivision (n)(3). Except for the purpose of receiving a refund or otherwise utilizing credits that have been carried forward, the credit provided for in this subdivision (n)(3) shall cease to be effective on January 1, 2029, and no new credit shall be allowed for tax years ending on or after January 1, 2029.

     (4)  A certified green energy supply chain manufacturer and any campus affiliates shall be allowed a carbon charge credit against the sum total of the taxes imposed by the Franchise Tax Law compiled in this part and the Excise Tax Law compiled in part 20 of this chapter, equal to any carbon charges incurred by or imposed directly on the certified green energy supply chain manufacturer, campus affiliate or imposed on the Tennessee Valley authority or other applicable energy provider and billed to the certified green energy supply chain manufacturer or campus affiliate during the applicable tax year. The Tennessee Valley authority, or the applicable energy provider, shall supply such information as deemed necessary by the commissioner of revenue to verify the amount of the carbon charge credit. Consistent with subdivision (n)(2), to the extent any amount allowed as a carbon charge credit under this subdivision (n)(4) exceeds the combined tax imposed by this part and by part 20 of this chapter after the application of all other available credits, the amount of the excess shall be considered an overpayment and shall be refunded to the taxpayer. The refund shall be subject to the procedures of § 67-1-1802; provided, however, that, notwithstanding any procedure of § 67-1-1802 to the contrary, a claim for refund must be filed with the commissioner within three (3) years from December 31 of the year in which the credit provided by this subdivision (n)(4) was incurred.

     (5)  The investment period for making the required capital investment may be extended by the commissioner of economic and community development for a reasonable period, not to exceed two (2) years, for good cause shown. For purposes of this subdivision (n)(5), “good cause” includes, but is not limited to, a determination by the commissioner of economic and community development that the capital investment is a result of the credit provided in this subsection (n).

[Acts 1999, ch. 406, § 4; 2000, ch. 973, § 1; 2000, ch. 982, §§ 34, 54-56; 2000, ch. 983, §§ 10, 11; 2003, ch. 202, § 1; 2004, ch. 592, §§ 1-4, 13, 14; 2004, ch. 924, § 14; 2005, ch. 490, § 1; 2005, ch. 499, §§ 59, 62, 63, 85, 88, 90; 2006, ch. 779, §§ 1, 2; 2006, ch. 1019, §§ 2-5, 8, 24, 25, 26, 29; 2007, ch. 602, §§ 2, 8-12, 180-182; 2008, ch. 1106, §§ 42, 44, 46-50, 52, 58, 62; 2009, ch. 477, § 1; 2009, ch. 530, §§ 1, 16, 17, 27, 132.]  

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