Taxes & Incentives

Fayetteville-Lincoln County Industrial Development Board provides assistance to companies seeking to expand or relocate their business in Fayetteville-Lincoln County. Our professional economic development staff will assist you with every aspect of the site selection process. To learn more about the advantages that Fayetteville-Lincoln County can offer your specific company, please call the Fayetteville-Lincoln County IDB office at 931-433-0607.

Included below is a general overview of state and local taxes and the incentives available. Qualifying and expanding businesses in Fayetteville-Lincoln County may qualify for assistance through statewide grant and loan programs, as well as TVA programs. Companies may qualify for loans with lower rates, and grants are available to county and local municipalities to help prepare sites. Learn more about these programs by visiting the websites…….

Fasttrack (FJTAP)

Fasttrack (FJTAP)

Fasttrack is Tennessee most utilized tool to assist communities in attracting new jobs. FastTrack focuses on assisting companies in the training of new employees and helping communities in the development of public infrastructure to assist companies in their expansion or relocation. For more information about FJTA, visit http://www.tn.gov/ecd/fasttrack or call 615-741-6201.

Tennessee Job Skills (TJS)

Tennessee Job Skills (TJS)

Similar to FJTAP, but with a focus on employers and industries that create high-skill, high-wage jobs in emerging, high –demand and technology-focused sectors of the economy. More information about TJS can be obtained by calling 615-741-6201.

Applicant Recruitment & Screening

Applicant Recruitment & Screening

Utilizing the company’s job specifications, the Tennessee Department of Labor and Workforce Development will recruit and screen job applicants meeting the department’s job service applicants through the department’s job service division. For more information on the Tennessee Department of Labor and Workforce Development, please visit http://www.tn.gov/labor-wfd/.

Business Enterprise Resource Office (BERO)

Business Enterprise Resource Office (BERO)

Since two-thirds of businesses in Tennessee are small businesses with 20 or fewer employees, the Business Enterprise Resource Office (or BERO) provides technical, financial and business plan development advice for small, minority-owned and woman-owned businesses across the state. For more information about FIDP, visit http://www.tn.gov/ecd/bero or call 615-741-2626 or 800-872-7201.

Job Tax Credit

Job Tax Credit

Tennessee allows “qualified business enterprise “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.

Basic Tax Information

BASIC TAX INFORMATION

Personal Income Tax

No statewide personal income tax
Consistently one of the lowest per capita taxed states in the nation.

Property Tax

Attractive depreciation schedules
Property Tax rates per $100 value
- City - $1.32
- County - $1.79
No property tax on:
- Goods-in-progress
- Finished goods inventories in hands of manufacturers
- Inventories of merchandise of sale
- Goods-in-transit (free port)

Sales and Use Tax

7% state sales tax plus the applicable local rate (1.50%-2.75%) on any person or company who manufactures, distributes or sells tangible personal property within the state.
No sales tax is levied on:
- Purchases, installation and repairs of qualified industrial machinery.
- Raw material for processing
- Certified pollution control equipment for manufacturers
- Machinery and equipment used for the production of electricity using clean energy technology including geothermal, hydrogen, solar and wind sources
- Material handling and racking systems for qualified warehouse and distribution facilities purchased during the three-year investment period.
- Computer equipment, peripheral devices and software purchased for a qualified data center with an investment of $250 million during the investment period.
- Reduced sales tax rates for manufactures' use of energy fuel and water (1.5% vs. 7%)
- Qualified industrial supplies
- Items purchased for resale
- Containers, packaging and wrapping materials.
Additional exemptions or credits may be available.

Excise Tax

Tax is based on the new earnings of the company derived from doing business in Tennessee...Companies doing business in Tennessee and other states use a 3-factor apportionment. Formula of property, payroll and sales with sales double-weighted.
Tax rate is 6.5%
No throwback provision –sales outside of Tennessee are not taxed
All capital losses are claimed in the year incurred.
Net operating losses for projects of more than $100 million may be extended beyond 15 years.
Net operating losses can be carried forward for 15 years.

Franchise Tax

Tax on the greater net worth or book value of property owned or used in Tennessee
Tax rate is 25c per $100.
Finished goods inventory in excess of $30million may be excluded
Pollution Control Equipment is exempt from franchise tax base
Property under construction and not being utilized is not included
Tennessee exempts two-thirds (2/3) of the capital investment of companies qualifying for the Job Tax Super Credit from the property measure of the franchise tax base during those tax years in which the annual Super Credit is allowed.

Tennessee Tool Kit

Tennessee Tool Kit

Tennessee Tool Kit is a guide to programs aimed at helping communities creates higher skilled, better paying jobs. Please visit http://www.jced.org/demographics/ECDToolkit.pdf.

Renewable Energy Incentives

Renewable Energy Incentives

Tennessee has established many forward-thinking business incentives specifically for the renewable energy sector, such as:

The Green Energy Tax Credit
Carbon Charge Tax Credit
Pollution Control Equipment Tax Credit
Incentives for Clean Energy Technology
Emerging Industry Tax Credit
Green Island Biofuel Corridor Infrastructure Grant
Tennessee Energy Loan Program
Reduced Tax on Electricity
Volunteer State Solar Initiative

For more information, visit http://www.tn.gov/ecd.

Local Level Incentives

LOCAL LEVEL INCENTIVES

Payment in lieu of Tax (PILOT)

Projects involving large capital investment and high levels of job creation may qualify for a property tax freeze. Formal approval for all PILOT applications is determined by Fayetteville-Lincoln County Industrial Development Board at regularly scheduled meetings. Approval is based on a number of performance standards, including the number and type of jobs created, annual base wage, capital investment in real and personal property, and the location of the project. The PILOT freezes property taxes at the pre-development level, so any portion of the project (such as the raw land) that is already on the tax roll prior to construction will continue to be taxed at the same level.

Tax Increment Financing (TIF)

Tax increment financing is a financing tool that is used in many states to provide public assistance to economic development projects. Through tax increment financing, incremental taxes from a designated area are allocated to pay debt serviceon debt incurred to pay for qualifying improvements that are made in connection with a particular project. In some states, the incremental tax revenues that may be utilized to pay the debt service on tax increment financing include property tax revenues, sales tax revenues and other tax sources. Under the Act in Tennessee, only incremental property tax revenues, and not sales tax or other tax revenues, may be used to pay debt service on tax increment financing.