Refund Opportunities for Tennessee Franchise Tax Taxpayers Beginning May 15

After much debate and compromise, Tennessee Gov. Bill Lee signed Tennessee SB2103, which eliminates the real and tangible property base from the franchise tax calculation applicable to tax years beginning on or after Jan. 1, 2024. The repeal is the state’s response to questions of constitutionality – specifically, whether the alternative tax base of the franchise tax violates the internal consistency doctrine under the dormant Commerce Clause of the United States Constitution and provides a refund opportunity to taxpayers that paid franchise tax on the property base.