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SALT Alert: Tennessee DOR Releases Notice Regarding Franchise Tax Property Measure Repeal

The Tennessee Department of Revenue has released Notice #24-05 discussing the franchise tax property measure repeal. The Notice provides guidance regarding how to handle 2023 returns; the timing of filing refund claims for 2020, 2021, 2022 and 2023; the impact on 2024 returns and estimated payments; and maybe most importantly, the refund claim, return filing process/procedures (which must be filed between May 15 and November 30, 2024).

Summary of Key Points:

  1. 2023 returns should be filed under current rules (i.e., property measure) and then a refund claim requested following the procedure in the Notice.
  2. 2024 returns (estimated payments) franchise tax should be calculated solely on the net worth measure.
  3. Refund claims must be filed between May 15 and November 30, 2024.
  4. Amended returns:
    • Should be filed through TNTAP in chronological order (i.e., 2020 before 2021, 2021 before 2022, etc.)
    • After filing the amended returns for all periods, must allow time for the amended returns to process before filing the refund claim.
    • Verify that the overpayment generated by the amended returns has posted to the TNTAP account before filing any refund claim.
  5. Refund claims:
    • File the Franchise Tax Property Measure Repeal refund claim form in TNTAP.
    • Refund claims must be accompanied by a completed Report of Debts form.
    • A balance sheet (pro forma or federal return pages supporting net worth calculation) should be provided with the refund claim to support the franchise tax due based on net worth and expedite the refund process.
  6. Other items:
    • If credits were previously applied on the return, any excess credits from the amended return will be reinstated for use in subsequent tax years.
    • Most refunds should be issued within 90 days.
    • The department is required to publish the name of every taxpayer who receives a refund along with the applicable range of the refund on the Department’s website on May 31, 2025, and remain posted through June 30, 2025.

Please contact Brian Strahle at brian.strahle@frazierdeeter.com for assistance.

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