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Machinery Tax Credit

Industrial Machinery Tax Credit

For capital investments in industrial machinery, Tennessee offers businesses an Industrial Machinery Tax Credit of 1-10%, depending on investment, that may be used to offset up to 50% of the company's F&E tax liability. To qualify for this credit, companies are not required to create new jobs. The credit applies to the purchase, installation and repair of industrial machinery as defined in T.C.A. 67-6-102. The credit also applies to the purchase and installation of computer, computer software and certain peripheral devices purchased in order to meet the capital investment thresholds of the Job Tax Credit. Any unused Industrial Machinery Tax Credit may be carried forward for up to 15 years. The investment period for the Industrial Machinery Credit is 3 years, but may be expanded to 5 years for businesses investing less than $1 billion and to 7 years for businesses investing $1 billion or more.