Tennessee Brownfield Tax Credit
Are you a commercial real estate developer in Tennessee leaving a valuable tax credit untapped for your development project? Lord & Winter is the TN based environmental consultant that can help you professionally complete the Brownfield Tax Credit Plan and apply for the brownfield tax credit!
TN Franchise and Excise Tax Credit
Exciting updates to the F&E tax credit provide numerous benefits. Now, you can enjoy a Franchise and Excise Tax Credit ranging from 50% to 75% of the purchase price, covering up to 100% of remediation and capital investment costs. Capital investment includes real property, tangible personal property, construction costs, and computer software, with a five-year investment period requirement.
Starting from July 1, 2023, you can claim up to 50% or 75% of the property purchase price, depending on whether your project is located in a Tier 1 or Tier 2 Tennessee enhancement county, or a Tier 3 or Tier 4 enhancement county, respectively.
Voluntary Cleanup and Oversight Program
A qualified development project is situated on "brownfield property" and must meet a minimum threshold of $25 million for Tier 1 and Tier 2, and $5 million for Tier 3 and Tier 4. Brownfield property refers to real property that undergoes investigation or remediation as part of a voluntary agreement or consent order. Typically, this includes projects associated with a Brownfield Voluntary Agreement under the Voluntary Cleanup and Oversight Program (VOAP).
Lord & Winter has an impressive track record of successfully completing VOAP projects in Tennessee for some of the most accomplished developers in the state.
Requirements and Processes
Keep in mind, a key requirement for the brownfield tax credit plan is to establish the economic impact of the development. The economic impact must be demonstrated to outweigh the tax credit issued and therefore is in the “Best Interest of the State”.
Once submitted, 3 review & approval signatures are required from separate departments of the state of Tennessee: Department of Revenue, TDEC Remediation Program, and TN ECD.
The F&E tax credit serves as a significant financial incentive for commercial real estate projects in Tennessee that participate in the Voluntary Oversight and Assistance Program and meet the purchase price threshold of $5 million to $25 million. Unused F&E credits may be amortized over 15 years increasing the incentive for your brownfield project.
Key things to remember when applying include:
- File with the Tennessee Department of Revenue
- The 5-acre minimum size in the original tax law has been removed
- The Commissioner of Revenue will approve or reject the credit, and issue the terms of approved credits
Don't let this valuable tax credit slip away. Take advantage of these opportunities by contacting Lord & Winter today!