Tennessee Economic Development Directory

Tennessee State Incentives

Through the FAST TRACK INFRASTRUCTURE DEVELOPMENT PROGRAM (FIDP), funds are allocated to assist local governments in providing infrastructure to support new or expanding industry. The following types of activities are eligible: water systems, wastewater systems, transportation projects, site improvement, or other specific infrastructure improvements required to support economic growth. Grants are limited to a maximum of $750,000 with amounts determined for individual projects.

The TENNESSEE SMALL BUSINESS ENERGY LOAN PROGRAM is designed to assist in the identification, installation, and incorporation of approved energy-efficiency measures for existing Tennessee businesses. Businesses of fewer than 300 employees or $3.5 million in annual gross sales or receipts can receive loans of up to $300,000. These loans are repaid at 3 percent interest over a period of time not to exceed seven years.

The FASTTRACK JOB TRAINING ASSISTANCE PROGRAM (FJTAP) provides training assistance as an incentive to attract new investment and to encourage existing business and industry to make additional investments in Tennessee. The training assistance is customized to each company’s individual training needs. Levels of training assistance are determined by the amount of the company’s investment, number of new hires, and the skills and knowledge that must be possessed by the prospective or newly hired employees. A customized training plan can be developed in direct coordination with company personnel. The training can be both pre-employment and post employment, including classroom and on the job. Reimbursement of instructional cost by company personnel and selected vendors is eligible for support. The expense of travel, for the purpose of training, is a viable option for the training of new hires and persons who will serve as company instructors.

TENNESSEE JOB SKILLS (TJS) is a work force development program giving priority to the creation and retention of existing jobs while focusing on employers in industries that promote high-skill, high-wage jobs in high technology, demand and emerging occupations. Training grants can be awarded to employers as an incentive for investing in new technologies, with the training being focused on the performance skills of their present employees affected by the introduction of the new technology. Training assistance can also be awarded to employers who certify that a specific job or job openings exist and at the completion of the training project those participants in the project will fill such job openings. The starting wage for a new job created through the project will be equal to or greater than the prevailing starting wage for that occupation in the local labor market.

BUSINESS ENTERPRISE RESOURCE OFFICE (BERO): Provides technical, financial and business plan development advice for small, minority-owned and woman-owned businesses across the state.

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM (CDBG): Grant dollars are available to communities with a population of fewer than 50,000 residents for the purpose of providing community development projects and attracting new or expanding companies, as long as the projects align with one of three national objectives:

• Principally benefit low and/or moderate income people
• Eliminate or prevent slums and/or blight
• Address imminent health and/or safety problems.

GREEN ISLAND CORRIDOR GRANT: Administered by the Tennessee Department of Transportation, assists retail vehicle fuel stations and farm co-ops with up to 80 percent of the cost to convert or install storage and fuel dispensing equipment for E85 and B20 pumps, with a cap of $45,000 per pump. TDOT advertises biofuel station locations on the Official State Map and provides interstate signage at exits with participating biofuel stations. This program is working to establish a statewide network of E85 and B20 pumps alongside interstate and major highway corridors to make these fuels available to citizens, travelers and fleets.

RURAL SMALL BUSINESS AND ENTREPRENEURSHIP LOAN FUND: Helps small businesses, specifically micro-businesses or micro-enterprises, grow and maintain their businesses. A micro-enterprise is a business with five or fewer employees including the owners. It is an alternative source of capital for small business owners who can’t get conventional bank loans and don’t want to use credit cards.

JOBS TAX CREDIT: Allows “qualified business enterprises” a credit against their franchise and excise taxes based on their capital investment and the number of jobs created. The amount of the credit and the period of time during which it can be used varies according to the size of the investment.

JOBS TAX SUPER CREDIT: Applies to those qualified businesses investing capital of $100 million or more and creating a minimum of 100 jobs paying at least 100 percent of Tennessee’s average occupational wage or investing $10 million in a qualified headquarters facility with the creation of at least 100 new headquarters jobs paying 150 percent of the average occupational wage.

These credits can be used to offset up to 100 percent of the company’s F&E tax liability each year for 3 to 20 years starting the first tax year after the job creation and capital investment thresholds have been met. The Super Credit does not include carry-forward provisions. The Super Credit is in addition to the regular Job Tax Credit, which will still have the 15 year carry-forward and 50 percent of offset. The only difference is by qualifying for the Super Credit, the amount of the regular Job Tax Credit increases to $5,000 per new occupational wage job instead of the regular $4,500.

RURAL OPPORTUNITY INITIATIVE ENHANCED JOB TAX CREDIT: If a qualified business enterprise locates or expands in a Tier 2 or Tier 3 Enhancement County (based on unemployment, per capita income and poverty levels), the company will be eligible for an annual Enhanced Job Tax Credit of $4,500 for each qualified job, provided that the job remains filled during the year in which the credit is being taken. The annual credit may be used to offset up to 100 percent of the company’s total franchise and excise (F&E) tax liability each year for a three-year period in Tier 2 counties and a five-year period in Tier 3 counties. The Enhanced Job Tax Credit for Tier 2 and Tier 3 Enhancement Counties is in addition to the regular Job Tax Credit and cannot be carried forward.

INDUSTRIAL MACHINERY TAX CREDIT: For capital investments in industrial machinery, it may be used to offset up to 50 percent of the company’s F&E tax liability. To qualify for this credit, companies are not required to create new jobs. The credit applies to the purchase, installation and repair of industrial machinery as defined in T.C.A. 67-6-102. The credit also applies to the purchase and installation of computer, computer software and certain peripheral devices purchased in order to meet the capital investment thresholds of the Job Tax Credit. Any unused Industrial Machinery Tax Credit may be carried forward for up to 15 years. The percentage of Industrial Machinery Credit allowed is dependent upon the investment made during the investment period.

HEADQUARTERS TAX CREDIT: A suite of enhanced tax credits to companies that establish or expand a qualified headquarters facility in Tennessee. A “qualified headquarters facility” means a regional, national or international headquarters facility where the taxpayer has made a minimum investment and either:

• Located its headquarters facility in a Central Business District or Economic Recovery Zone and received approval from the Commissioner of Revenue as a “qualified headquarters facility”
• $50 million in a headquarters building or buildings, newly constructed, expanded or remodeled during the investment period, or
• $10 million in a headquarters facility and the creation of 100 new full-time jobs paying at least 150 percent of Tennessee’s average occupational wage during the investment period.

DATA CENTER TAX CREDIT: Companies may obtain tax credits for the purchase of materials related to the construction of a qualified data center, which is defined as a building or buildings housing high technology computer systems and related equipment in which the taxpayers had made a minimum capital investment of $250 million and has created 25 new jobs paying at least 150 percent of the state’s average occupational wage.