Tennessee businesses will be eligible to receive more pandemic assistance through a bill that will exempt relief funds from state taxes.
Tennessee lawmakers last Monday night successfully guided unanimous passage of House Bill 776 which exempts Covid-19 relief payments received between March 1, 2020 and Dec. 31, 2021 from the state’s excise taxes.
This legislation provides an excise tax deduction for Tennessee business and entities that have received or will receive such relief payments in 2020 and 2021.
Businesses that received funds from the following programs are eligible for the deduction: Tennessee Business Relief Program; Tennessee Supplemental Employer Recovery Grant Program; Coronavirus Agricultural and Forestry Business Fund; Hospital Staffing Assistance Program; Emergency Medical Services Ambulance Assistance Program; Tennessee Small and Rural Hospital Readiness Grants Program; and payments issued by Tennessee from the federal Child Care and Development Block Grant.
Covid relief payments must be deducted from the tax year in which they were awarded. Once House Bill 776 becomes law, taxpayers who have already filed a franchise and excise tax return for the 2020 tax year will be able to amend the return to take the deduction for eligible relief payments received in 2020. The companion bill awaits passage in the Senate Chamber.
