State Incentives

State of Tennessee Incentive Fact sheet

Grants

FastTrack Economic Development Fund

  • Grants covering relocation expenses, temporary office space, capital improvements, retro-fitting and other expenditures not covered by infrastructure or job training grants.
  • Only used in exceptional cases where a company’s impact on a given community is significant.

FastTrack Infrastructure Program

  • Infrastructure grants for rail, roadway, port, airport, water, sewer, gas, telecommunication or other site improvements.
  • Grantees are local communities only; must be for public infrastructure improvements benefiting a specific company generating new jobs and investment; requires local matching funds.

FastTrack Training Program

  • Grant assisting companies with training expenses and the development of customized training plans.
  • Funding levels are based on number of new jobs created, amount of capital invested, wages, types of skills/knowledge needed.
    Tax Credits and Exemptions

Job Tax Credit

  • Credit of $4,500 per job to offset up to 50% of franchise and excise (F&E) taxes in any given year with a carry forward for up to 15 years.
  • To qualify, companies must create at least 25 new jobs within a 36 month period and invest at least $500,000 in a qualified business enterprise.
    Enhanced Job Tax Credit
  • Allows an additional annual credit for locations/expansions in designated Tier 2 and Tier 3 Enhancement Counties. Enhanced JTC can offset up to 100% of F&E liability for either a three or five year period as determined by the Tier.
  • Madison County is designated Tier 2, so companies can receive a $4,500 job tax credit plus additional three years annual credit at $4,500 per year with no carry forward.
  • To qualify, companies must create at least 25 new jobs within a 36 month period and invest at least $500,000 in a qualified business enterprise.

Super Job Tax Credit

  • Credit of $5,000 per new job to offset up to 100% of F&E tax liability for a period of 3-20 yrs., depending on investment amount; no carry forward.
  • To qualify, companies must invest $100M or more and create a minimum of 100 new jobs paying at least 100% of TN’s average occupational wage; OR
  • Establish or expand a headquarters location, invest at least $10M and create 100 new HQ jobs paying at least 150% of TN’s average occupational wage.

Industrial Machinery Tax Credit

Credit of 1% to 10% for the purchase, third-party installation and repair of qualified industrial machinery.

  • Manufacturing – Includes purchases for machinery; apparatus and equipment with parts; appurtenances and accessories; repair parts and labor; computer; network; software or peripheral computer devices.
  • Warehousing and Distribution – Includes material handling equipment and racking systems with a minimum $10M capital investment within 36 months; computer; network; soft-ware or peripheral computer devices.
  • Headquarters, Data Centers, Call Centers -Includes computer; network; software or peripheral computer devices.

Headquarters Relocation Expense Tax Credit

Credit against F&E tax liability based on qualified relocation expenses incurred (amount varies based on number of relocated positions).

Must receive state approval for expenses and file Qualified Headquarters Business Plan before claiming the credit.

Sales and Use Tax Exemptions

  • Manufacturing – State sales tax exemption for industrial machinery and reduced state sales tax rate for utilities at qualified manufacturing facilities. Exemptions include industrial machinery, repair parts, industrial supplies, water, gas, electricity and various energy sources used in the manufacturing process. Reductions include: 0-1.5% tax on water depending on use and 0-1.5% on gas, electricity and various energy sources depending on use.
  • Headquarters – Reduced state sales tax rate for qualified personal property purchased for a qualified headquarters facility. Investment period begins one year. prior to construction/expansion and ends one year. after construction/expansion has concluded, but can be extended to six years. with permission from the state. HQs receive a non-expiring sales tax credit for 6.5% for qualified personal property directly related to job creation.
  • Warehouse/Distribution – State sales tax exemption for certain equipment purchased for a qualified warehouse or distribution center. To qualify, companies must have an investment of $10 million or more, including the purchase of new equipment, made during a three year period. Exemptions include equipment purchased for use in the storage, handling or movement of personal property.
  • Call Centers – Tax exemption on any sales of interstate telecommunication and international telecommunication services to a business for use in the operation of one or more qualified call centers. Must have at least 250 jobs engaged primarily in call center activities.
  • Data Centers – State sales tax exemption for certain hardware and software purchased for a qualified data center. Minimum capital investment of $250M and 25 new jobs paying at least 150% of the state’s avg. occupational wage; investment must be made during a three year. period, but can be ex-tended to five years. for investments under $1 billion or seven years. for investments exceeding $1 billion with the state’s permission. Exemptions include computers, computer systems, and computer software used in qualified data centers. Reduction includes a 1.5% tax rate on electricity.

Other

Applicant Recruitment and Screening

Free assistance with the recruitment and screening of job applicants based on a company’s specific job requirements. More than 70,000 potential employees in statewide database.

State Industrial Access Program

Funds the construction of roadways to support industrial areas based on project type, economic benefit, physical constraints and available funding.