Tennessee House and Senate leaders are battling over the details of a franchise tax break, with some predicting litigation is guaranteed if lawmakers approve the House’s shorter rebate time frame and transparency provision.
Negotiators agree the property value portion of the state’s franchise tax will be eliminated after Gov. Bill Lee’s administration predicted the state would face “significant legal risk” if it didn’t revamp the tax and offer rebates. Some 80 companies questioned the tax’s property value measure and said it could come under legal scrutiny based on a 2015 Supreme Court ruling out of Maryland.
Reaching an agreement, though, is proving difficult because House and Senate versions of the bill differ widely.
Tennessee Chamber of Commerce & Industry President and CEO Bradley Jackson said Wednesday a narrower disclosure rule could bring the two chambers closer together.
But, he added, a shorter refund period could lead to lawsuits against the state because under state law, a three-year “look-back” is set as part of the due process in business tax challenges.