Taxes and Incentives
Every project, whether it be a new recruitment or the expansion of an existing industry, is evaluated on a case-by-case method to determine incentive eligibility.
In order for Innovation Valley's economic development team to determine if your project is eligible to receive incentives, we will need to know the following general project information: total proposed capital investment, number of net new jobs to be created, and wages of the newly created jobs.
Incentives typically fall into three main categories:
- Infrastructure - public utility extensions and upgrades, industrial access roads, railroad spurs, etc.
- Workforce training funds
- Tax credits
Incentives are provided by many different entities including: the State of Tennessee Department of Economic Development, Tennessee Valley Authority, and the local governments of the Innovation Valley.
Low taxes—or no taxes—mean a better bottom line for Tennessee businesses:
- No personal income tax
- No state sales tax on manufacturing equipment for qualified businesses
- No sales tax on pollution control equipment
- No sales tax on raw material
Tennessee offers many other business tax incentives, including:
- Reduced sales tax on energy fuel and water for qualified manufacturers
- "Double weighting" of Tennessee sales for franchise and excise taxes
- 1% tax credit on capital equipment
- Jobs tax credit of $4,500 per employee
Local incentives make the Innovation Valley an especially favorable area for business:
- PILOT (Payment in Lieu of Taxes) tax freeze on a portion of local real and personal property for a duration dependent on location and other variables such as total capital investment, net new jobs, and wages
- Development of infrastructure and site preparation work required to make a site buildable; determined on a case-by-case basis
- Local training grants for skilled workforce positions
- Land price discounts for potential businesses; determined on a case-by-case basis
More information on state incentives at Tennessee Department of Economic and Community Development.