Jobs Tax Credit

The State of Tennessee has long been considered a tax-friendly place to do business. Its low tax environment enhanced by aggressive tax credits for businesses has been the primary reason so many world-class companies have chosen Tennessee for their businesses. The State of Tennessee considers McMinn County as a Tier 2 community, meaning that businesses are given enhanced credits to locate in McMinn. Below is a sampling of tax credits a business may be eligible for when investing and creating jobs in McMinn County. Additional tax credits and incentives may apply and be identified through the site selection process.

Jobs Tax Credit

$4500 per Job Tax Credit

Tennessee allows “qualified business enterprises” a credit against their franchise and excise taxes based on their capital investment and the number of jobs created. The amount of the credit and the period of time during which it can be used varies according to the size of the investment.

A qualified business investing $500,000 in a 12 month period and creating 25 net new jobs not to exceed a 36 month period can claim a Job Tax Credit of $4,500 per job tax credit. The Job Tax Credit may offset up to 50% F&E liability with 15 year carry forward with an additional Enhanced Job Tax Credit of $4,500 per job each year for 3 years to offset up to 100% of F&E liability with no carry-forward. The approval process for the Job Tax Credit requires a Job Tax Credit Business Plan be filed with the Department of Revenue prior to taking the credit. The credit may not be taken until the year the 25 job threshold is met unless the business has requested and received a waiver from the Commissioner of Economic and Community Development and Commissioner of Revenue. In 2010 Tennessee amended the statutory requirements to allow the Commissioner of Economic and Community Development and Commissioner of Revenue to waive the minimum job requirement of 25 net new jobs if the company has made the necessary $500,000 investment in a 12 month period and the jobs are high-skill, high-wage jobs in high technology areas, emerging occupations or skilled manufacturing. A company must request and receive a waiver before claiming the Job Tax Credit.