On May 10, 2024, Governor Bill Lee signed Public Chapter 950 (2024), which eliminates the property measure from the franchise tax calculation and authorizes the Department of Revenue to issue franchise tax refunds to eligible taxpayers. Taxpayers who paid the franchise tax on the property measure using Schedule G for tax years ending on or after March 31, 2020, for which a return was filed with the department on or after January 1, 2021, are eligible for a refund. Eligible taxpayers must amend the returns for all eligible tax periods to create the Schedule G overpayment and then request the overpayment amount as a refund. Both the amended returns and the refund claim must be submitted by November 30, 2024.
The department will add more guidance to this page. Please check back regularly for updates.
Taxpayers who paid the franchise tax on the property measure (Schedule G) for tax years ending on or after March 31, 2020, for which a return was filed with the Department on or after January 1, 2021, are eligible for a refund.
In addition, taxpayers who timely filed a claim under Tenn. Code Ann. § 67-1-1802 prior to January 1, 2024, that alleged the franchise tax was unconstitutional by failing the internal consistency test are eligible for the franchise tax schedule G refund for all years included in the original claim. However, a new franchise tax schedule G refund claim form must be filed.
Taxpayers must file refund claims between May 15, 2024, and November 30, 2024. The Department encourages eligible taxpayers to amend returns and file a claim for refund as soon as possible.
Examples:
- Taxpayer paid the franchise tax on net worth (Schedule F) from 2020 through 2023. The taxpayer is not eligible for a refund.
- Taxpayer paid the minimum $100 on its tax return from 2020 through 2023. The taxpayer is not eligible for a refund.
- Taxpayer paid the franchise tax on the property measure (Schedule G) for calendar year 2020 and filed the return in April 2021. The taxpayer is eligible for a refund for this period.
- Taxpayer paid the franchise tax on the property measure (Schedule G) for the calendar year 2019 and filed the return in April 2021. The tax period ended prior to March 31, 2020, and the taxpayer is not eligible for a refund for this period.
- Taxpayer paid the franchise tax on the property measure (Schedule G) for the short period of January through April 2020 and filed the return in August 2020. The taxpayer is not eligible for a refund for this period because the return was filed with the Department prior to January 1, 2021.
Note: Updated on May 16, 2024.
The Department will mail notification letters to all taxpayers it has identified that may be eligible for a refund. Regardless of whether you receive a notification letter, we encourage you to review your records and/or consult a tax professional to determine if you qualify for a refund.
If you are eligible, you must apply for a refund pursuant to the steps below.
Taxpayers will be eligible for a refund that equals the amount of franchise tax paid based on the property measure (Schedule G) minus the amount of franchise tax that would have been paid based on the net worth measure (Schedule F) for the same tax year.
To obtain a refund, taxpayers are required to file amended franchise and excise tax returns for the affected tax years and file a Claim for Refund of Franchise Tax Paid on Property Measure (Schedule G) form. The amended returns and refund claims must be submitted by November 30, 2024.
To ensure your claim is processed as quickly as possible, follow these steps:
- Log into TNTAP and file an amended franchise and excise tax return for each tax period that will be included in the refund claim. Report franchise tax on the returns using the version of Schedule F that applies to the taxpayer (Schedule F1, F2, or F/SF) instead of Schedule G. The amended returns must be filed in chronological order by tax year (i.e., 2020 before 2021, etc.).
- After filing the amended return(s) for all periods, wait overnight for the Department’s tax system to process the amended returns.
- Submit the Franchise Schedule G Repeal Refund claim form in TNTAP. The standard Claim for Refund form will not be accepted for this purpose.
a. The claim form requires a completed report of debts if the refund requested is $200 or more.
b. A balance sheet, schedule of assets/liabilities, pro forma, or federal return pages supporting the net worth calculation by entity may be attached to the claim to support the amount due per Schedule F but is not required. If an amended return requires additional review, this supporting information may decrease the time required to process your claim. If the taxpayer does not provide this information with its claim, the taxpayer may later be required to provide such information.
The department strongly encourages taxpayers to file their amended returns and refund claims in TNTAP to ensure the claim is processed as quickly as possible.
Taxpayers who are unable to file electronically may submit paper amended returns and a paper refund claim form.
Taxpayers must file refund claims between May 15, 2024, and November 30, 2024. The Department encourages eligible taxpayers to amend returns and file a claim for refund as soon as possible.
Refund claims submitted after November 30, 2024, will not qualify for a refund.
No. A claim for refund based on this legislation must only include the amount of franchise tax actually paid based on the property measure (Schedule G) minus the amount otherwise due based on net worth and any includable affiliated indebtedness (Schedule F).
In addition to amended returns, the refund claim form requires a completed report of debts if the refund requested is $200 or more. A balance sheet, schedule of assets/liabilities, pro forma, or federal return pages supporting the net worth calculation by entity may be attached to the claim to support the amount due per Schedule F, but this information is not required. If an amended return requires additional review, this supporting information may decrease the time required to process your claim. If not attached, the taxpayer may later be required to provide such information.
To the extent tax was paid on the original return (per Schedule G) with tax credits from Schedule D (e.g., industrial machinery credits, job tax credits, etc.), any previously applied tax credits in excess of those applied on the amended return(s) using Schedule F will be reinstated on the taxpayer’s account rather than refunded.
No. Taxpayers must file amended returns for each tax period for which they are requesting a refund and must also file the specific refund claim form for this purpose.
If a taxpayer’s refund claim is approved, the department will mail the refund payment to the mailing address on file. When you file your refund claim, you will have an opportunity to confirm your mailing address. Refunds cannot be applied as a credit on a taxpayer’s franchise tax account.
The Department will process refund claims as quickly as possible.
Processing will take longer if a taxpayer submits a refund claim on paper, fails to amend all required returns prior to submitting a refund claim form, or is asked to submit additional supporting information, such as a balance sheet, and does not promptly respond.
Please wait at least 2 to 3 weeks after completing all steps before checking on the status of your refund claim. Status inquiries can be sent to FAE.AuditHelp@tn.gov.
Note: Updated May 13, 2024.
Amended returns and refund claims filed by taxpayers are confidential tax information that the department is prohibited by law from disclosing or making available for inspection to the public.
However, the legislation that authorizes the department to issue these refunds requires the department to publish the name of each taxpayer issued a refund and the applicable range corresponding to the total amount refunded to the taxpayer, which will be published in a list on the department’s website on May 31, 2025, and remain posted through June 30, 2025. The applicable ranges are: $750 or less; $751 - $10,000; and more than $10,000.
Specific refund amounts will not be disclosed. If a taxpayer has filed a refund claim but the claim is still pending with the department on May 31, 2025, the name of the taxpayer will be published with the range omitted and designated as "pending".
Taxpayers may call the Department at (615) 253-0700 or submit a request to our help desk at https://revenue.support.tn.gov.
For returns filed for tax years ending on or before December 31, 2023, taxpayers must complete Schedule G and calculate franchise tax based on the greater of Schedule F net worth or Schedule G property.
Taxpayers who pay franchise tax based on Schedule G property may then request a refund of franchise tax pursuant to the refund procedure, including the Claim for Refund of Franchise Tax Paid on Property Measure (Schedule G) form. Tax year 2023 refund claims must include this refund claim form to ensure taxpayers are complying with the new law’s requirements related to disclosure of taxpayer names and the waiver of certain legal rights.
For tax years ending before January 1, 2024, taxpayers must calculate franchise tax on the greater of the company’s net worth or the book value of real or tangible personal property owned or used in Tennessee.
For tax years ending on or after January 1, 2024, taxpayers will calculate franchise tax on net worth using Schedule F.
Yes. Taxpayers that claimed a credit on their gross receipts tax return for franchise tax paid during a tax period that is included in their refund claim must amend the impacted gross receipts tax return(s) to reflect the change in franchise tax credit. After the taxpayer receives its franchise tax property measure (Schedule G) refund, it should amend the impacted gross receipts tax return(s) to reflect the new amount of franchise tax paid credit.
Yes. Upon accepting this refund, the law requires that taxpayers must knowingly waive all claims and rights of action in any court, state or federal, against the Tennessee Department of Revenue, Commissioner of Revenue, State of Tennessee, or its employees, based on any theory that the franchise tax in Title 67, Part 21, or any provision of Part 21, including T.C.A. § 67-4-2108, as that Part and those provisions existed before the enactment of SB2103/HB1893 (2024), is unconstitutional by failing the internal consistency test.
The denial of a refund, whether in whole or in part, is subject to the remedies provided in Tenn. Code Ann. § 67-1-1802. The new law, however, requires that a suit challenging the denial or deemed denial of a franchise tax property measure (Schedule G) repeal refund claim must be filed in the chancery court of Sumner County.
Note: Updated on May 13, 2024.
A suit that contains a claim or allegation that any provision of the franchise tax, including T.C.A. § 67-4-2108 as that section previously existed, is unconstitutional by failing the internal consistency test must be filed on or before November 30, 2024.
Note: Added on May 13, 2024.
Taxpayers and authorized tax preparers may amend returns using their tax preparation software. However, the Department is aware that tax year 2020 returns can no longer be amended via MeF and has worked with the IRS to identify a workaround that software vendors can implement to allow 2020 returns to be filed via MeF. The Department has sent information on that workaround to the software vendors, in hopes that the vendors will implement that solution. However, if the vendors choose not to do so, taxpayers and preparers will have to amend returns for 2020 through TNTAP or using a paper return.
The special Claim for Refund of Franchise Tax Paid on Property Measure (Schedule G) form cannot be completed using tax preparation software. That form must be submitted through TNTAP or using the paper form.
Note: Added on May 13, 2024.
If you have corrections to your originally filed Schedule F, those corrections should be made on the same amended return filed for this purpose. If you previously filed an amended return to correct amounts reported on Schedule F, or if the Department previously adjusted the amounts reported on this schedule as the result of an audit, you should include those corrections on your amended return. Please ensure the amount reported on Schedule F is correct before submitting your amended return.
No other Schedules should be modified when amending returns for purposes of this refund.
Note: Added on May 13, 2024.
No. A claim for refund based on this legislation must only include the amount of franchise tax actually paid based on the property measure (Schedule G) minus the amount otherwise due based on net worth and any included affiliated indebtedness (Schedule F). The passage of this legislation will not alone be considered good and reasonable cause to approve late-filed consolidated net worth elections.
If a taxpayer has not yet filed its 2023 return and wishes to elect CNW for purposes of calculating its franchise tax base, the taxpayer may still make that election on or before the extended due date of the 2023 return. Such election will remain in effect for at least 5 years.
If a taxpayer has paid franchise tax on the property measure (Schedule G) in some years and on net worth (Schedule F) in some years and a CNW election was in effect for those years, the taxpayer will be expected to amend its returns using Schedule F2 for calculating franchise tax on a CNW basis for purposes of seeking a refund for any eligible years franchise tax was paid on the property measure (Schedule G).
Note: Added on May 13, 2024.
The new law establishes the November 30, 2024, deadline for refund claims. Although that date falls on a Saturday, taxpayers must submit their amended returns and the special refund claim form by November 30, 2024. The Department will accept electronic filings on November 30 and will also accept filings submitted by mail with a November 30 postmark date.
Note: Added on May 13, 2024.
Yes. Interest will begin to accrue if the Department does not issue a refund within 90 days of the Department receiving the claim and proper proof to verify the refund is due. The interest rate is the federal rate for large corporate overpayments, which is currently at 5.5%.
Note: Added on May 13, 2024.
No. The Department will not issue 1099-Gs to taxpayers that receive a refund through this process because it is a refund of franchise tax.
Note: Updated on May 16, 2024.
No. A refund can only be paid to the business entity that remitted the tax. A refund claim cannot be filed or paid if the legal entity no longer exists.
Note: Added on May 16, 2024.