Republican leaders last week advanced the Tennessee Works Tax Reform Act of 2023 that proposes a number of changes to the state’s tax code and represents an unprecedented $407 million in tax cuts impacting every Tennessean.
The cuts provide significant tax relief to small businesses by lowering the burden of the franchise and excise tax as well as the business tax rate. The bill would allow more than 23,000 small businesses in Tennessee to reduce their excise tax liability to zero by exempting the first $50,000 in income from the state’s excise tax. It also exempts up to $500,000 of business property from franchise tax liability.
The proposal will strengthen Tennessee’s economic competitiveness while prioritizing businesses within our state’s borders. It incentivizes businesses to hire Tennesseans and headquarter here. It ensures state tax deductions for research and development (R&D) expenses that help companies grow, innovate and produce superior products and services.
