Job Tax Credit
A standard job tax credit is available to taxpayers that invest in Tennessee and create jobs as a result of the investment. Taxpayers that meet the requirements of a qualified business enterprise, make the required capital investment of at least $500,000 * within three years (five years in a tier 3 or 4 enhancement county), and create a minimum number of qualified jobs from the investment may receive a job tax credit equal to $4,500 for each qualified job. The minimum number of qualified jobs that must be created from the investment are:
- 25 jobs in a tier 1 or 2 enhancement county,
- 20 jobs in a tier 3 enhancement county, or
- 10 jobs in a tier 4 enhancement county.
Each county in the state is annually designated as a tier 1, 2, 3, or 4 enhancement county.
Taxpayers must submit a Job Tax Credit Business Plan and receive tentative approval from the Department before any credit may be taken. Records and Recommended Documentation should be maintained for verification purposes. Schedules are available to assist taxpayers with maintaining this information.
The standard job tax credit may offset up to 50% of the taxpayers franchise and excise taxes. Unused standard job tax credits, earned in tax years ending on or after December 31, 2008, may be carried forward up to 25 years. Taxpayers that qualify may also receive an additional annual job tax credit.
Taxpayers that qualify may also receive an additional annual job tax credit. In some cases a minimum wage rate based on the average occupational wage is required.
In addition, there is a job tax credit available to taxpayers that employ persons with disabilities and a community resurgence job tax credit for businesses located in a high-poverty area according to the 2020 American Community Survey.
* $10,000,000 for businesses engaged in convention and trade show enterprises