Following a similar announcement from the IRS, the Tennessee Department of Revenue said it will extend the filing and payment deadline for Hall income tax returns and, for certain taxpayers, the franchise and excise tax return from April 15 to May 17. NFIB advocated for the change. Click here for details.

Tax Information on TN Business Relief Program, Recovery Grants

The state Department of Revenue has issued the following guidance on state COVID-19 relief payments as they related to the state’s business tax and franchise and excise taxes:

Business Relief Program (BRP) and Supplemental Employer Recovery Grant (SERG) payments are subject to Tennessee franchise and excise tax, but they are not subject to business tax.

Tennessee established the BRP and SERG programs using federal CARES Act funds. The IRS says that if a state government establishes an economic relief program (such as BRP and SERG) to support businesses using CARES Act funds, the receipt of payments by a business from such a program is included in federal taxable income and subject to federal taxation. Because the starting point for determining a Tennessee franchise and excise tax liability is federal taxable income, these payments will be subject to franchise and excise tax.

These payments are not included in gross receipts for Tennessee business tax purposes and are not subject to business tax.

If you have questions or need assistance, contact the Department of Revenue at revenue.support@tn.gov or call 615-253-0600 weekdays during business hours. For additional information, visit the departments’ website.