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TAXES AND INCENTIVES

Local Taxes

State Taxes

Warehouse & Distribution Facilities

Customized Training

Local Incentives

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LOCAL TAXES

Algood

Baxter

Cookeville

Monterey

Sparta

For Overton County and White County tax information, please visit the following Web sites:

- Overton County Chamber of Commerce
- White County Chamber of Commerce

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STATE TAXES

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WAREHOUSE & DISTRIBUTION FACILITIES

Qualified, new or expanded warehouse and distribution facility - means a new or expanded facility, which meets the requirements set out in 67-6-102(a)(16) (H) for the storage or distribution of finished tangible personal property. Such facilities shall not include a building where tangible personal property is fabricated, processed, assembled, or sold over-the-counter to consumers.

Franchise Tax

• Tax on the greater of net worth or book value of property owned or used in Tennessee
• Tax rate is 25 cents per $100
• Incentives:
  • Finished goods inventory in excess of $30 million may be excluded
  • Pollution Control Equipment is exempt
  • Property under construction and not being utilized is not included
  • Property rented from the industrial development corporation may be valued by capitalizing it on the books

Excise Tax

• Tax is based on the net earnings of the company derived from the business in Tennessee
• Tax rate is 6.5%
• Incentives:
  • Mo throwback provision - sales outside of Tennessee are not taxed
  • Receive 1% tax credit for the purchase of qualified equipment associated with the required capitol investment by a distribution or warehouse facility.
  • All capital losses claimed in the year incurred
  • Net operating losses can be carried forward for 15 years

Sales and Use Tax

7% state sales tax plus the applicable local rate (2.25% - 2.75%) on any person or company who manufactures, distributes or sells tangible personal property within the state.

No Sales Tax Is Levied On:

• Purchases, installation and repairs of qualified industrial machinery
• Raw materials for processing
• Pollution control equipment for manufacturers
• Reduced sales tax rates for manufacturers' use of energy fuel and water (1.5% vs. 7%)
• Qualified industrial supplies
• Items purchased for resale
• Containers, packing and wrapping materials
• Additional exemptions or credits may be available

Jobs Tax Credit

Tennessee 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.

• A company investing $500,000 dollars and creating 25 new jobs can claim a $2,000 dollar credit against their F & E taxes over a period of 15 years.
• If the company locates in an economically distressed county (see map, page 7-8), the Jobs Tax Credit increases to $4,500 dollars per job with a 15 year carry-forward.
• The company can qualify for a $4,500 Jobs Tax Credit if it invests $20 million dollars in capital and creates a minimum of 1,000 jobs in a federally designated empowerment zone. Currently, Tennessee's only federally designated empowerment zone is in Knoxville, Tenn.
• The percentage of tax liability companies are able to offset ranges from 33.33% to 100% based on the number of jobs created, ranging from 1,000 to 5,000 or more.

Industrial Machinery Tax Credit

For capital investments in industrial machinery, Tennessee offers manufacturers a tax credit offsetting up to 50% of 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 and telephone equipment purchased in order to meet the capital investment thresholds of the Jobs Tax Credit.

Headquarters Tax Credit

In order to encourage companies to locate their corporate headquarters in Tennessee, the state offers tax credits based on the cost of relocating the company and building a new headquarters facility in Tennessee.

• With a capital investment of $50 million dollars or more, the company may qualify for a credit of 6.5% against sales and use taxes incurred on the purchase of building materials, machinery or equipment used in a new regional, national or international headquarters.
• A project involving a capital investment of $10 million dollars or more and creating 100 jobs paying 150% of the state's average occupational wage may qualify for a credit of 6.5% against sales and use taxes incurred on the purchase of building materials, machinery or equipment used in a new regional, national or international headquarters.
• Companies qualifying for the sales and use tax credit may also qualify for credits against their F & E tax liability based on the amount of qualified relocation expenses incurred in the establishment of a headquarters facility.
• Companies with a regional, national or international headquarters facility in Tennessee may (with approval from the Commissioner of Revenue and the Commissioner of Economic and Community Development) convert unused net operating losses (NOL) to a credit against F & E tax liability.
• The NOL credit is available only if the company is unable to use the NOL to offset net income during the current tax year.

Property Tax

• No state property tax

Sales and Use Tax

• No sales tax on the purchase of material handling and racking systems for warehouse and distribution facilities meeting the requirements set forth in 67-6-102(a)(16)(H);
• A required capital investment of $10,000,000
• The investment period not to exceed 3 years
• An application and business plan filed and approved by the Department of Revenue

Additional Tax Credit

FastTrack Job Training Assistance Program (FJTAP)

This incentive is available to both new and expanding industries and begins with a company developing a training plan including the number of people to be hired, types of skills required ad types of training needed. The plan is developed in conjunction with the FastTrack staff and is designed to be tailored and flexible. Companies will track costs associated with implementation of the training program, then submit to the state for reimbursement. Training may include:

• Classroom instruction.
• On-the-job training.
• Vendor training from the manufacturer of a piece of industrial equipment.
• System support for certain types of plant-wide or company-wide applications.
• Development and coordination of instructional materials and training programs.
• Travel related to training.

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CUSTOMIZED TRAINING

Training

• Tennessee Technological University Center for Manufacturing Research (CMR) - This center's mission is to advance and support scientific and engineering knowledge in areas related to manufacturing through fundamentals research and technology transfer activities, and to impact the instructional program in those areas.
• The University of Tennessee Center for Industrial Services (UTCIS) - They help Tennessee's manufacturers become more productive, profitable, and competitive. CIS helps companies with new production techniques or business practices, expanding markets, complying with regulations and a host of other issues.
• Nashville State Community College - The Workforce and Community Development (WCD) of Nashville State Community College offers high quality and innovative employee training professional development, continuing education, industrial, computer, technical, and soft skills training. Through collaboration and expertise, WCD can design programs which meet your company's and employees specific needs.
• Volunteer State Community College - In addition to offering open enrollment training programs on campus each semester, Volunteer State provides specialized on-site training and consulting - from English as a Second Language (ESL) to HYPERLINK "http://www.volstate.edu/ContinuingEd/documents/SixSigma.pdf" Lean Six Sigma.  They can design a unique training and development roadmap to achieve your workforce development objectives. When their training and consulting is delivered in your facility, they work with your team to ensure the material is relevant to your organization.

Job Specific Training

(Training assistance is targeted to production/technician level individuals.)

• Classroom - formal instruction relating to specific skills presented in a classroom environment
• On-the-Job Training - instruction that focuses on the development of specific skills and knowledge vital to production. Training is provided by company technicians or instructors mutually acceptable to the FastTrack Job Training Assistance Program (formerly the Industrial Training Service) and the company. Training may take place in the classroom or at the company site. Vendor or manufacturer of actual manufacturing or service equipment being used by the client may be utilized to deliver specific skills training.
• System Support - instruction associated with plant-wide applications. Instruction may include new methods for increasing mechanization, quality, materials handling, etc.
• Development and Coordination - supports the cost associated with the development of instructional materials and coordination of the overall training program.

Travel

Supporting the expense of travel for the purpose of training can be considered as a viable option for the training of new hires and especially for persons who will serve as a company instructor.

Employee Recruitment and Screening

The Tennessee Department of Labor and Workforce Development, Job Service Division, will provide recruitment and screening services. Utilizing the client/company's prepared job specifications, Job Service will recruit the number of persons requested by the company. The persons will be screened using the company's specifications. Those persons meeting the specifications will be referred to the company for employment considerations.

Workforce Development

• Leadership Training - is directed toward providing supervisors, team leaders, and managers with the interpersonal skills necessary to motivate and lead production workers towards the accomplishment of organizational goals.
• Team Training - is provided for manufacturing/production employees where interpersonal communication is important in fostering interdependence, cooperation, commitment, motivation, etc.
• Instructor Certification - Certification of company personnel insures the availability of certified instructors not only at startup but also on a long term basis. The weeklong certification seminar provides candidates with the facilitation skills necessary to deliver a wide range of programs.

FastTrack Infrastructure Development Program (FIDP)

In order to qualify for this program, local communities must apply to ECD with a goal of improving public infrastructure in order to create new jobs and business investment. Applications must be for specific projects and must be tied to a company commitment to create or retain a defined number of jobs. Qualifying projects must involve companies engaging in manufacturing or other economic activities beneficial to the state of Tennessee. Companies for whom more than 50% of the product or service is involved in the manufacture of products for export are also eligible. FIDP grants require local community matching funds calculated along a varying scale based on a community's ability to pay.

FastTrack Infrastructure Development funds can be utilized to build:
  • Water systems, including intake structures, treatment plants, storage tanks, transmission
     lines or other structures associated with public water service.
  • Wastewater systems, including collector lines, treatment plants and other structures
     associated with public wastewater treatment services.
  • Transportation systems, including industrial access roads, rail sidings, port facilities, airport
     improvements and other public transportation infrastructure.
  • Site improvements, including grading, infilling, leveling or other extraordinary situations in
     which the physical conditions of a site must be altered in order to allow capital investment for
     job creation.
  • Technology systems, including the extension of broadband or high speed data transmission
     lies necessary for companies to conduct business.
  • Other improvements to the physical infrastructure of a site may be considered if communities
     can demonstrate such improvements are required for the location or expansion of a business
     which creates jobs.

FastTrack Infrastructure Development funds CAN help BEFORE a project is underway:
FIDP funds MAY be utilized by communities to construct public infrastructure to community-owned speculative buildings and to speculative industrial areas and industrial parks. To qualify, a community must be located in Tier 1, Tier 2 or Tier 3 Economically Distressed County.
  • Communities seeking technical expertise on transportation improvements designed to
     facilitate business investment and job recruitment may also qualify for the State Industrial
     Access Program (SIAP). Communities may submit multiple designs for an industrial
     project to engineers with the Tennessee Department of Transportation for comment on
     feasibility.
  • ECD will also provide counseling to communities seeking to obtain Industrial Revenue Bond
     financing in either a taxable or tax free scenario.

State Industrial Access Program (SIAP)

Other state assistance can be considered for providing needed transportation improvement for the project. Through the State Industrial Access Program (SIAP), local governments submit their requests on behalf of new industry moving into their communities, which the Department of Transportation reviews to determine the most feasible design.

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LOCAL INCENTIVES

These incentives are based upon: the investment in real and personal property, the number of new jobs, and the average wage of the jobs. Each project is evaluated on a case by case basis. The plan is flexible and is offered at the discretion of the Putnam County Industrial Development Board. Applications are made through the Cookeville-Putnam County Chamber of Commerce located at 1 West First Street, Cookeville, TN 38501

Tax Abatement (real and personal property taxes) for qualifying new and existing companies meeting certain criteria.

Land purchases in the Highlands Mixed Use Business Park and the Lemon Farris Industrial Park may be offered at a discount by the City and County to qualifying companies.

Industrial Revenue Bonds may be authorized by Algood, Baxter, Cookeville, and Putnam County for the financing of Industrial facilities.

Emerging Industry Tax Credits

Tennessee law gives the Commissioner of Revenue and the Commissioner of Economic and Community development broad latitude in classifying certain projects as part of an emerging industry. If companies can demonstrate a strong growth potential and commit to creating jobs which pay above the county's average occupational wage, the state may waive the threshold of 25 new jobs created in order to qualify for the Jobs Tax Credit.

Daycare Facility Tax Credit

In order to encourage the construction of daycare facilities, the state of Tennessee offers companies a tax credit against their F & E tax liability equal to the cost of 25% of the construction of a facility with a cost not to exceed $100,000 dollars per facility and a tax credit not to exceed $25,000 dollars per facility.

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Come back home

Putnam County • Overton County • White County

 

Cookeville-Putnam County Chamber of Commerce
info@cookevillechamber.com

Local Phone: 931-526-2211
Toll-Free: 800-264-5541
Fax: 931-526-4023
One West First Street
Cookeville, TN 38501