TN – December 23, 2024 – The Tennessee Department of Revenue has unveiled its Fiscal Year 2024 Tax Credit Report, providing insight into the tax credits claimed by businesses for the tax periods from July 1, 2023, to June 30, 2024. This year’s report highlights how businesses are benefiting from various tax credit programs, including those aimed at job creation, industrial investments, and community development.
Key Findings from the FY 2024 Report
Several tax credits were claimed by businesses across Tennessee, with notable figures in community investment, industrial machinery, and job creation. Here are the key findings:
- The Gross Premiums Tax Credit, which is applied to taxes paid on gross premiums, totaled $36.8 million.
- Community Investment Credits, used for housing and community development, saw a significant increase, amounting to $84.7 million.
- On the job creation front, the Job Tax Credit program led to the creation of 3,618 new jobs.
Here’s a detailed breakdown of the tax credits claimed in FY 2024:
| Credit Name | Description | Number of Taxpayers | New Jobs Created | Credits Claimed |
|---|---|---|---|---|
| Gross Premiums Tax Credit | Tax paid on gross premiums | 88 | N/A | $36,855,110 |
| Broadband Credit | Purchase of broadband equipment | — | N/A | — |
| Brownfield Property Credit | Brownfield property investment | — | N/A | — |
| Paid Family and Medical Leave Credit | Paid family and medical leave | 56 | 0 | $141,857 |
| Green Energy Credit | Green energy investments | 0 | N/A | $0 |
| Loss Carryover Credit | Net operating loss carryover | — | N/A | — |
| Community Investment Credit | Housing and community investment | 76 | N/A | $84,783,194 |
| Rural and Small Business Opportunity Fund Credits | Contributions to rural and small business funds | 18 | N/A | $3,484,548 |
| Industrial Machinery Credit | Purchase of industrial machinery | 1,373 | N/A | $58,344,968 |
| Qualifying Environmental Project Credit | Environmental project investments | — | N/A | — |
| Job Tax Credit | Job creation and capital investment | 267 | 3,618 | $21,285,203 |
| Additional Annual Job Tax Credit | Job creation in enhancement counties | 61 | N/A | $24,510,088 |
| Additional Annual Job Tax Super Credit | Large-scale investment and job creation | 10 | N/A | $14,239,081 |
| TV and Film Production Tax Credit | Qualified production expenses | — | N/A | — |
Total Credits Claimed: $252,029,733
Job Tax Credits by Business Sector
A closer look at the sectors that benefited from the Job Tax Credit program reveals that industries like Headquarters Facilities, Computer Services, and Manufacturing were among the largest recipients. Here’s the breakdown of job tax credits by sector:
| Business Sector | Number of New Jobs | Number of Taxpayers | Credits Claimed |
|---|---|---|---|
| Call Centers | 13 | — | $712,857 |
| Computer Services | 789 | 43 | $6,629,958 |
| Convention and Trade Show Facilities | 0 | 0 | $0 |
| Headquarters Facilities | 1,605 | 172 | $9,357,015 |
| High-Tech and Skilled Manufacturing | 0 | 0 | $0 |
| Manufacturing | 1,041 | 26 | $3,564,736 |
| Research and Development | 14 | — | — |
| Tourism-Related Industries | — | — | — |
| Warehousing and Distribution | 43 | 26 | — |
Comparison with FY 2023
When comparing the figures from FY 2024 with those of FY 2023, we observe a decrease in total credits claimed, as well as a dip in the number of new jobs created. However, certain credits like the Community Investment Credit have shown growth.
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Total Credits Claimed | $312,283,639 | $252,029,733 |
| Total Taxpayers Claiming Credits | 1,953 | 1,756 |
| Total New Jobs Created | 7,434 | 3,618 |
| Largest Claimed Credit | Industrial Machinery Credit ($84.5M) | Community Investment Credit ($84.7M) |
Looking Ahead
As we move into Fiscal Year 2025, the trends from FY 2024 suggest businesses are becoming more selective in utilizing tax credits, with a particular focus on investments that can drive long-term economic growth, such as community development and industrial expansion. The increase in Community Investment Credits is a positive indicator of Tennessee’s growing commitment to housing and community-related projects.
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