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Taxes & Incentives

Fayetteville-Lincoln County Industrial Development Board assists companies seeking to expand or relocate their business in Fayetteville-Lincoln County.  Our professional economic development staff will assist you with every aspect of the site selection process.  To learn more about the advantages that Fayetteville-Lincoln County can offer your specific company, please call the Fayetteville-Lincoln County IDB office at 931-433-0607.
Included below is a general overview of state and local taxes and the incentives available.  Qualifying and expanding businesses in Fayetteville-Lincoln County may qualify for assistance through statewide grant and loan programs, as well as TVA programs.  Companies may qualify for loans with lower rates, and grants are available to county and local municipalities to help prepare sites.  

Personal Income Tax

• No statewide personal income tax
• Consistently one of the lowest per capita taxed states in the nation.
 

Property Tax

  •  Attractive depreciation schedules
  •  Property Tax rates per $100 value:
    • City - $1.50
    • County - $2.10
  •  No property tax on:
    • Goods-in-progress
    • Finished goods inventories in the hands of manufacturers
    • Inventories of merchandise of sale
    • Goods-in-transit (free port)

Sales and Use Tax

  • 7% state sales tax plus the applicable local rate (1.50%-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 material for processing.
    • Certified pollution control equipment for manufacturers.
    • Machinery and equipment used for the production of electricity using clean energy technology including geothermal, hydrogen, solar and wind sources.
    • Material handling and racking systems for qualified warehouse and distribution facilities purchased during the three-year investment period.
    • Computer equipment, peripheral devices, and software purchased for a qualified data center with an investment of $250 million during the investment period.
    • Reduced sales tax rates for manufacturers' use of energy fuel and water (1.5% vs. 7%).
    • Qualified industrial supplies.
    • Items purchased for resale.
    • Containers, packaging and wrapping materials.
    • Additional exemptions or credits may be available.

Excise Tax

  • Tax is based on the new earnings of the company derived from doing business in Tennessee...Companies doing business in Tennessee and other states use a 3-factor apportionment. The formula of property, payroll, and sales with sales double-weighted.
  • Tax rate is 6.5%
  • No throwback provision –sales outside of Tennessee are not taxed
  • All capital losses are claimed in the year incurred.
  • Net operating losses for projects of more than $100 million may be extended beyond 15 years.
  • Net operating losses can be carried forward for 15 years.

Franchise Tax

  • Tax on the greater net worth or book value of property owned or used in Tennessee
  • Tax rate is 25c per $100.
  • Finished goods inventory in excess of $30million may be excluded
  • Pollution Control Equipment is exempt from the franchise tax base
  • Property under construction and not being utilized is not included
  • Tennessee exempts two-thirds (2/3) of the capital investment of companies qualifying for the Job Tax Super Credit from the property measure of the franchise tax base during those tax years in which the annual Super Credit is allowed.