Tennessee Home Adopts Measure To Make State Corporate COVID-19 Aid Tax Deductible

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 Tennessee House Adopts Measure To Make State Corporate COVID-19 Relief Tax Deductible

(The Center Square) – Some Tennessee businesses could get more COVID-19 pandemic aid after a law was unanimously passed Monday night to exempt aid funds from state taxes.

House bill 776 would exempt COVID-19 relief payments received between March 1, 2020 and December 31, 2021 from state excise taxes.

The related Senate bill is to be discussed on Tuesday in the Senate’s Finance, Ways and Means Committee.

The bill would allow funds from the Coronavirus Aid, Relief and Economic Security Act, and others to be tax deductible, said Rep. Ron Gant, R-Rossville, co-sponsored the house bill.

“I think it’s important that we don’t tax these companies with the money they need to keep going,” said Rep. Patsy Hazlewood, R-Signal Mountain, during the discussion at a House Finance meeting last week , Ways and Means Committee.

The Tennessee Treasury Department issued a notice on the bill Monday stating that funds cannot be withdrawn until the bill is fully passed. “If a taxpayer wishes to delay filing their 2020 return, the taxpayer can apply for an extension of the filing period pending the passage of this legislation, which gives a taxpayer who meets the renewal requirements an extension of six months from the original tax return due date granted to file the tax return. “

Funds may be withdrawn from the following programs: Tennessee Business Relief Program; Tennessee Supplemental Employer Recovery Grant Program; Coronavirus Agriculture and Forestry Fund; Hospital Staff Support Program; Rescue service program for emergency services; Tennessee Small and Rural Hospital Readiness Grants Program; and payments from Tennessee from the Federal Child Care and Development Block Grant.

The relief payments are to be deducted from taxes for the tax year in which the relief money was granted.

“Should this law come into effect, the department will publish guidelines informing taxpayers on how to apply for excise duty deduction. If this law is passed, taxpayers who have already filed a franchise and excise tax return for the 2020 tax year will be able to amend the declaration to receive the excise deduction for eligible relief payments received in 2020, “the Treasury Department said in a statement .

The Tennessee General Assembly’s Fiscal Review Committee estimated that the state would forego $ 9 million in revenue over the next two fiscal years if the law went into effect.