Taxes, Exemption and Credits

Plain English Breakdown

The official source does not specify how the tax credit will affect state revenue or penalties for misuse.

Tax Credit for Donated Spent Grain Byproducts

This bill creates a tax credit for beer manufacturers who donate spent grain byproducts for agricultural use within Tennessee.

What This Bill Does

• Creates a new tax credit for eligible taxpayers, such as beer brewers and manufacturers, who donate spent grain byproducts for agricultural purposes.
• Limits the amount of the tax credit to eight cents per pound of donated dry weight spent grain byproduct.
• Requires donations to be made within 100 miles of where the grain was used to produce beer.
• Caps the total annual tax credit at $30,000 or the total excise taxes paid by the taxpayer during the state fiscal year, whichever is less.
• Allows the Department of Revenue and Agriculture to create rules for implementing this law.

Who It Names or Affects

• Beer manufacturers who hold a manufacturer license or permit in Tennessee.
• Taxpayers who donate spent grain byproducts for agricultural use within the state.
• The Department of Revenue, which will manage applications and determine eligibility.

Terms To Know

Eligible taxpayer

A beer manufacturer or brewer with a valid license or permit in Tennessee.

Spent grain byproduct

The leftover material from grains used to produce beer, which can be donated for agricultural use.

Limits and Unknowns

• The bill does not specify how the tax credit will affect state revenue.
• It is unclear if there are any penalties for misuse or misreporting of the tax credit.
• The effectiveness and impact on agriculture and beer manufacturing industries remain to be seen.

Official Summary Text

Effective July 1, 2027, this bill creates a tax credit for an eligible taxpayer who is
the holder of a manufacturer license to brew high alcohol content beer or the holder of a permit to brew or manufacture beer in this state
against taxpayer's excise tax liability.
The amount of
such
credit for a state fiscal year is equal to the product of eight cents, and the number of pounds dry weight of spent grain byproduct donated by the taxpayer during the state fiscal year
in the following situations
:



For agricultural use, including for use in composting or as animal feed.


To a recipient located in this state that is not more than 100 miles from the location where the spent grain byproduct was used to produce beer, including high alcohol content beer.

However, this bill prohibits a
n eligible taxpayer
from
claim
ing
in a state fiscal year a credit that exceeds the lesser of $30,000 or the total amount of excise taxes paid by the taxpayer during the state fiscal year.

APPLICATION FOR CREDIT

This bill requires a
taxpayer
to
apply for a credit in the manner prescribed by the department of revenue. The department may request from a taxpayer information reasonably necessary to determine whether the taxpayer is an eligible taxpayer and
,
if the taxpayer is an eligible taxpayer, the amount of the credit.

RULEMAKING

This bill authorizes the department of revenue, in consultation with the department of agriculture, to promulgate rules to effectuate
this bill
.

Current Bill Text

SENATE BILL 2339
By Seal

HOUSE BILL 1901
By Reedy
HB1901
011430
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AN ACT to amend Tennessee Code Annotated, Title 43;
Title 57 and Title 67, relative to tax credits for
alcoholic beverage byproducts donated for
agricultural use.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 57, is amended by adding the following
as a new chapter:
57-8-101. Definitions.
As used in this chapter:
(1) "Department" means the department of revenue;
(2) "Eligible taxpayer" means the holder of a manufacturer license to
brew high alcohol content beer or the holder of a permit to brew or manufacture
beer in this state; and
(2) "Spent grain byproduct" means the byproduct material remaining from
grain used to produce beer, including high alcohol content beer.
57-8-102. Eligibility for tax credit.
An eligible taxpayer is entitled to a credit in the amount and under the conditions
provided by this chapter against the taxpayer's excise tax liability under title 67, chapter
4, part 20.
57-8-103. Amount of credit – Limitation.
(a) Subject to subsection (b), the amount of an eligible taxpayer's credit for a
state fiscal year is equal to the product of:
(1) Eight cents (8¢); and

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(2) The number of pounds dry weight of spent grain byproduct donated
by the taxpayer during the state fiscal year:
(A) For agricultural use, including for use in composting or as
animal feed; and
(B) To a recipient located in this state that is not more than one
hundred miles (100 mi.) from the location where the spent grain
byproduct was used to produce beer, including high alcohol content beer.
(b) An eligible taxpayer shall not claim in a state fiscal year a credit under this
chapter that exceeds the lesser of:
(1) Thirty thousand dollars ($30,000); or
(2) The total amount of excise taxes paid by the taxpayer during the state
fiscal year.
57-8-104. Application for credit.
(a) A taxpayer must apply for a credit under this chapter in the manner
prescribed by the department.
(b) The department may request from a taxpayer information reasonably
necessary to determine:
(1) Whether the taxpayer is an eligible taxpayer; and
(2) If the taxpayer is an eligible taxpayer, the amount of the credit.
57-8-105. Rules.
The department, in consultation with the department of agriculture, may
promulgate rules to effectuate this chapter. Rules must be promulgated in accordance
with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
SECTION 2. Tennessee Code Annotated, Section 67-4-2009, is amended by adding
the following as a new, appropriately designated subdivision:

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( ) A credit must be allowed against the tax imposed by this part in accordance
with title 57, chapter 8;
SECTION 3. The headings in this act are for reference purposes only and do not
constitute a part of the law enacted by this act. However, the Tennessee Code Commission is
requested to include the headings in any compilation or publication containing this act.
SECTION 4. For purposes of promulgating rules, this act takes effect upon becoming a
law, the public welfare requiring it. For all other purposes, this act takes effect July 1, 2027, the
public welfare requiring it.