Taxes and Incentives

Loudon County Tax

County property tax rate = $1.5138/$100 Property tax is levied on real and personal property

Assessment ratios for real and personal property include:

industrial real property = 40%
commercial real property = 40%
industrial and commercial tangible personal property = 30%
residential and agricultural property = 25%

Property tax exemptions include: goods-in-process, finished goods inventories, and goods-in-transit (Freeport)

Visit the Loudon County Property Assessor Online

State & Local Taxes

Tax	State	Monroe & Loudon
Corporate Excise	6.5%	none
Franchise	$0.25 per $100	none
Sales and Use	7.0%	2.0%
Personal Income	none on earned income; 6% of interest on stock or dividends	none
Initial Corporate Organization Fee	$100-600	none
Utility Gross Receipts	3%	none
Local Business Tax	none	none
Unemployment Insurance	2.7% new employers	none
Motor Vehicle Tax	varies according to weight and size	varies according to weight and size

Monroe County Tax

Property Tax The Monroe County tax rates are $2.23 per $100 of assessed value. The Town of Vonore’s tax rate is $0.35 per $100 of assessed value.

Industrial & Commercial Real Property (land & building) 40%

Industrial & Commercial Personal Property machinery & equipment) 30%

Residential & Farm Property 25%

Visit the Monroe County Property Assessor Online

Sales and Use Tax

State and local sales taxes are levied on the purchase or lease price of tangible personal property purchased or leased in Tennessee, except items purchased for resale. Taxable services, as defined under the law, are subject to sales tax.

State Sales Tax: 7%

Monroe County Sales Tax: 2.25%

Loudon County Sales Tax: 2%

Unemployment Tax

The first $7,000 in employment wages are taxed at the rate of 2.7%. After three calendar years, the employer is assigned a tax rate based on experience. Tennessee unemployment compensation taxes serve as a credit against federal unemployment taxes owed.

Tennessee Tax Incentives

State of Tennessee Incentives for Growth

Grants

FASTTRACK INFRASTRUCTURE PROGRAM

Grants made to local governing bodies for public infrastructure improvements must be for specific infrastructure projects benefiting one or more companies committed to creating new jobs and/or making new capital investments
Covers infrastructure such as rail, public roadway, port, airport, site, water, sewer, gas and telecommunication improvements
Requires local matching funds based on a community’s ability to pay
Requires a Payment In Lieu Of Tax (PILOT) for at least 5 years on real property

FASTTRACK JOB TRAINING ASSISTANCE PROGRAM

Grant assisting new or expanding companies with funding to support the training of net new full-time employees

FASTTRACK ECONOMIC DEVELOPMENT FUND

Has the ability to offset costs companies incur when expanding or locating a business operation in Tennessee with reimbursable grants made to local governing bodies
Can offset the costs in a variety of ways, including retrofitting building, acquiring real property, relocation of equipment, and other expenditures not otherwise eligible under the FastTrack Infrastructure Program or Job Training Assistance Program
Only used in exceptional cases where the impact of the company on a given community is significant

FASTTRACK ELIGIBILITY AND FUNDING LEVELS ARE DETERMINED BY:

Number of new full-time jobs
Weighted average wages of new full-time jobs
Amount of company investment
Types of skills and knowledge that must be obtained
Location of the project

BONUS INCENTIVE:

At-Risk County: 35% premium to projects that locate in a county defined by the Appalachian Regional Commission as “at-risk”
Distressed County: 50% premium to projects that locate in a county defined by the Appalachian Regional Commission as “distressed”

In order to receive either premium, the project must provide an average starting wage that meets or exceeds the median county wage. TNECD reserves the discretion to approve or deny the premium based on the facts and circumstances of the project.

TAX CREDITS

Competitive tax incentives make Tennessee a smart choice for doing business. We have one of the country’s lowest per capita tax burdens, no income tax, and no state property tax.

Tax credits include those based on the number of jobs created, amount invested, type of business and location. We also have credits for qualified industrial machinery purchases and a series of sales and use tax exemptions.

JOB TAX CREDIT	Credit of $4,500 per job to offset up to 50% of franchise and excise (F&E) taxes in any given year with a carry forward for up to 15 years.	Create at least 25 net new full-time positions within a 36 month period and invest at least $500,000 in a qualified business enterprise.
	Community Resurgence: Credit of $2,500 per each position.	Create 10 net new full-time jobs each paying the state’s average occupational wage and also be located in a census tract where poverty rate exceeds 30%.
ENHANCED JOB TAX CREDIT	Allows an additional annual credit for locations/expansions in designated Tier 2, Tier 3, and Tier 4 Enhancement Counties. Enhanced JTC can offset up to 100% of F&E liability.
	Tier 2: 3 year annual credit at $4,500 per job with no carry forward.	Create at least 25 net new full-time positions within a 36 month period and invest at least $500,000 in a qualified business enterprise.
	Tier 3: 5 year annual credit at $4,500 per job with no carry forward.	Create at least 20 net new full-time positions within 60 month period and invest at least $500,000 in a qualified business enterprise
	Tier 4: 5 year annual credit at $4,500 per job with no carry forward.	Create at least 10 net new full-time positions within 60 month period and invest at least $500,000 in a qualified business enterprise.
INDUSTRIAL MACHINERY TAX CREDIT	Credit of 1% to 10% for the purchase, third party installation and repair of qualified industrial machinery.	Manufacturing: includes purchases for machinery; apparatus and equipment with parts; appurtenances and accessories; repair parts and labor.
		Warehousing and distribution: includes material handling equipment and racking systems with a minimum $10M capital investment within 36 months.
		Headquarters, call centers: includes computer; network; software or peripheral computer devices, purchased in making required capital investment for job tax credit.
SALES AND USE TAX EXEMPTIONS	Manufacturing: sales tax exemption for industrial machinery and reduced sales tax rate for utilities at qualified manufacturing facilities.	Exemptions include industrial machinery, repair parts and industrial supplies used in the manufacturing process. Reductions include: 0-1.5% tax on water depending on use and 0-1.5% on gas, electricity and various energy sources depending on use.
	Headquarters: State sales tax credit for qualified personal property purchased for a qualified headquarters facility.	HQs receive a sales tax credit for 6.5% for qualified personal property directly related to the new full-time job creation.
	Warehouse/Distribution: Sales tax exemption for material handling and racking systems purchased for a qualified warehouse or distribution center.	Investment of $10M or more, including the purchase of new equipment, made during a 3 year period.
	Call Centers: Tax exemption on any sales of interstate telecommunication and international telecommunication services sold to a business for use in the operation of one or more qualified call centers.	Must have at least 250 jobs engaged primarily in call center activities.
	Data Centers: Sales tax exemption for certain hardware and software purchased for a qualified data center.	Minimum capital investment of $100M and 15 new full-time positions paying at least 150% of the state’s avg. occupational wage; investment must be made during a 3 yr. period.
	Research and Development: Sales tax exemption on certain equipment used in research and development.	Equipment must be used necessary to and primarily for research and development purposes.

Tennessee Incentives at a Glance

Community Development Block Grant (CDBG)

Administered by the Tennessee Department of Economic and Community Development
Two programs included in the CDBG program are available to local communities
- Economic development program - grants for industrial infrastructure or loans for industrial buildings and equipment
- Community development program - grants for water and wastewater, housing rehabilitation, and community livability
Grant or Loan must meet one of three national objectives
- principally benefit low and moderate income persons
- eliminate or prevent slums and blight
- address imminent health and safety problems
Maximum grant or loan amount is $500,000 (local match required)
Interest rates
- Years 1-5 - 3 points below prime
- Years 6-10 - 2 points below prime
- Years 11-20 - 1 points below prime

Small Business Administration Loans

Provides financial, technical, and management assistance to help small business owners to run and grow their businesses
Provides business loans, loan guarantees, and disaster loans worth more than $45 billion
Nation's largest financial backer of small businesses
Service Corp of Retired Executives (S.C.O.R.E.) counseling offered through the Loudon County Chamber or Commerce. Some of the subjects S.C.O.R.E. volunteers can help you with are:
- stages of forming a business including start up requirement for all Tennessee businesses and obtaining business licenses and taxes
- how to prepare a business plan
- insurance for the small business
- how to secure financing
- selecting the legal structure for your business
- what business records to keep
East Tennessee Development District assists with Small Business Administration loan applications
SBA 504 Loan Program - This program provides funding for the acquisition, construction, or renovation of commercial real estate or for the purchase of machinery and equipment. Eligibility standards require that the loans be owner occupied, for-profit businesses with a tangible net worth of $15 million or less and an average net income after Federal income taxes for the preceding two completed fiscal years of $5 million or less. These loans have 10 year and 20 year terms, depending on the use of funds and offer a fixed rate for the life of the loan with no call dates. The financing structure for each loan project calls for 50% private lender first mortgage, a 10 - 20% borrower injection, with the balance funded through the SBA 504 Program.