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SB0784 • 2026

Taxes, Exemption and Credits

AN ACT to amend Tennessee Code Annotated, Section 67-4-2109, relative to tax credits for financial institutions.

Housing Taxes
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Walley, Baum
Last action
2025-05-27
Official status
Comp. became Pub. Ch. 496
Effective date
Not listed

Plain English Breakdown

The official source material does not provide specific details on modifying the calculation method for tax credits or extending the effective date. These claims were removed as they are not supported by the provided information.

Tax Credits for Financial Institutions

This law changes how financial institutions can receive tax credits based on loans they give to housing projects.

What This Bill Does

  • Changes the percentage of unpaid principal balance that financial institutions can use as a credit against taxes from 3% annually to 5% annually for certain types of loans.

Who It Names or Affects

  • Financial institutions that make loans or investments in housing projects.
  • Housing entities receiving qualified low-rate loans and grants from financial institutions.

Terms To Know

Tax Credit
A reduction of the amount of tax owed, based on certain activities or expenses.
Unpaid Principal Balance
The remaining part of a loan that has not yet been paid back by the borrower.

Limits and Unknowns

  • This law applies only to tax years beginning on or after January 1, 2026.
  • The exact impact on state revenue cannot be determined due to multiple unknown variables.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

Amendment 1-0 to HB0691

Plain English: The amendment changes the effective date of a bill related to tax credits for financial institutions.

  • Changes the act's effective date from an unspecified time to January 1, 2026.
  • The original Section 3 that is being replaced is not provided in the amendment text, so details about what it contained are unknown.
  • It is unclear why January 1, 2026, was chosen as the effective date and if there were specific reasons for this change.
Amendment 1-0 to SB0784

Plain English: The amendment changes the effective date of a section in Senate Bill No. 784 from an unspecified date to January 1, 2026.

  • Changes the effective date of Section 3 of SB0784 to January 1, 2026.
  • The amendment text does not specify what changes are made in Section 3 or why the new effective date is required.
  • It's unclear what specific tax credits for financial institutions will be affected by this change.

Bill History

  1. 2025-05-27 Tennessee General Assembly

    Comp. became Pub. Ch. 496

  2. 2025-05-27 Tennessee General Assembly

    Effective date(s) 01/01/2026

  3. 2025-05-27 Tennessee General Assembly

    Pub. Ch. 496

  4. 2025-05-21 Tennessee General Assembly

    Signed by Governor.

  5. 2025-05-09 Tennessee General Assembly

    Transmitted to Governor for his action.

  6. 2025-05-08 Tennessee General Assembly

    Signed by Senate Speaker

  7. 2025-04-30 Tennessee General Assembly

    Signed by H. Speaker

  8. 2025-04-28 Tennessee General Assembly

    Enrolled; ready for sig. of H. Speaker.

  9. 2025-04-22 Tennessee General Assembly

    Companion House Bill substituted

  10. 2025-04-22 Tennessee General Assembly

    Passed Senate, Ayes 33, Nays 0

  11. 2025-04-22 Tennessee General Assembly

    Amendment withdrawn. (Amendment 1 - SA0448)

  12. 2025-04-22 Tennessee General Assembly

    Senate substituted House Bill for companion Senate Bill.

  13. 2025-04-22 Tennessee General Assembly

    Received from House, Passed on First Consideration

  14. 2025-04-21 Tennessee General Assembly

    Placed on Senate Regular Calendar for 4/22/2025

  15. 2025-04-21 Tennessee General Assembly

    Recommended for passage with amendment/s, refer to Senate Calendar Committee Ayes 11, Nays 0 PNV 0

  16. 2025-04-21 Tennessee General Assembly

    Engrossed; ready for transmission to Sen.

  17. 2025-04-21 Tennessee General Assembly

    Passed H., as am., Ayes 92, Nays 0, PNV 0

  18. 2025-04-21 Tennessee General Assembly

    H. adopted am. (Amendment 1 - HA0502)

  19. 2025-04-17 Tennessee General Assembly

    Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2025

  20. 2025-04-17 Tennessee General Assembly

    H. Placed on Regular Calendar for 4/21/2025

  21. 2025-04-17 Tennessee General Assembly

    Placed on cal. Calendar & Rules Committee for 4/17/2025

  22. 2025-04-17 Tennessee General Assembly

    Rec. for pass. if am., ref. to Calendar & Rules Committee

  23. 2025-04-17 Tennessee General Assembly

    Rec. for pass by s/c ref. to Finance, Ways, and Means Committee

  24. 2025-04-16 Tennessee General Assembly

    Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/17/2025

  25. 2025-04-16 Tennessee General Assembly

    Sponsor(s) Added.

  26. 2025-04-14 Tennessee General Assembly

    Placed on Senate Finance, Ways, and Means Committee calendar for 4/15/2025

  27. 2025-04-14 Tennessee General Assembly

    Rule #83(8) Suspended, to be heard in Senate Finance, Ways & Means Committee on 4/15/2025

  28. 2025-04-09 Tennessee General Assembly

    Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/14/2025

  29. 2025-03-11 Tennessee General Assembly

    Refer to Senate Finance, Ways & Means Committee w/ negative recommendation, as amended

  30. 2025-03-04 Tennessee General Assembly

    Placed on Senate FW&M Revenue Subcommittee calendar for 3/11/2025

  31. 2025-02-26 Tennessee General Assembly

    Placed behind the budget

  32. 2025-02-19 Tennessee General Assembly

    Placed on s/c cal Finance, Ways, and Means Subcommittee for 2/26/2025

  33. 2025-02-18 Tennessee General Assembly

    Refer to Senate F,W&M Revenue Subcommittee

  34. 2025-02-12 Tennessee General Assembly

    Passed on Second Consideration, refer to Senate Finance, Ways, and Means Committee

  35. 2025-02-10 Tennessee General Assembly

    Introduced, Passed on First Consideration

  36. 2025-02-10 Tennessee General Assembly

    Assigned to s/c Finance, Ways, and Means Subcommittee

  37. 2025-02-06 Tennessee General Assembly

    P2C, ref. to Finance, Ways, and Means Committee

  38. 2025-02-05 Tennessee General Assembly

    Intro., P1C.

  39. 2025-02-04 Tennessee General Assembly

    Filed for introduction

  40. 2025-02-03 Tennessee General Assembly

    Filed for introduction

Official Summary Text

Present law provides that, for any financial institution, a credit against the sum total of the taxes impose
d by the Franchise Tax Law and by the Excise Tax Law is allowed in an amount equal to either (i) 5% of a qualified loan or qualified long-term investment made to an eligible housing entity for any eligible activity or (ii) 3% annually of the unpaid princi
p
al balance of a qualified loan made to an eligible housing entity for any eligible activity as of December 31 of each year for the life of the loan or 15 years, whichever is earlier. This bill revises (ii) by increasing the percentage from 3% to 5% annua
l
ly of the unpaid principal balance of a qualified low-rate loan made to an eligible housing entity for any eligible activity as of December 31 of each year for the life of the loan or 15 years, whichever is earlier.

Present law provides that, for any fin
ancial institution, a credit against the sum total of the taxes imposed by the Franchise Tax Law and by the Excise Tax Law is allowed in an amount equal to either (i) 10% of a grant, contribution, or qualified low-rate loan made to an eligible housing ent
i
ty for any eligible activity or (ii) 5% annually of the unpaid principal balance of a qualified low-rate loan made to an eligible housing entity for any eligible activity as of December 31 of each year for the life of the loan or 15 years, whichever is ea
r
lier. This bill revises (ii) to, instead, be 5% annually of the month-end average unpaid principal balance of a qualified low-rate loan made to an eligible housing entity for any eligible activity for the financial institution's fiscal year life of the l
o
an or 15 years, whichever is earlier.

ON APRIL 21, 2025, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 691, AS AMENDED.

AMENDMENT #1 extends the effective date of the bill from July 1, 2025, to January 1, 2026, and clarifies that the bill applie
s
to tax years beginning on or after
January 1, 2026.

Current Bill Text

Read the full stored bill text 
HOUSE BILL 691
By Baum

SENATE BILL 784
By Walley

SB0784
002403
- 1 -

AN ACT to amend Tennessee Code Annotated, Section
67-4-2109, relative to tax credits for financial
institutions.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-4-2109(h)(1)(B), is amended by
deleting the subdivision and substituting instead:
(B) Three percent (3%) annually of the month-end average unpaid principal
balance of a qualified loan made to an eligible housing entity for any eligible activity for
the financial institution's fiscal year life of the loan or fifteen (15) years, whichever is
earlier.
SECTION 2. Tennessee Code Annotated, Section 67-4-2109(h)(2)(B), is amended by
deleting the subdivision and substituting instead:
(B) Five percent (5%) annually of the month-end average unpaid principal
balance of a qualified low-rate loan made to an eligible housing entity for any eligible
activity for the financial institution's fiscal year life of the loan or fifteen (15) years,
whichever is earlier.
SECTION 3. This act takes effect July 1, 2025, the public welfare requiring it.