Taxes, Exemption and Credits

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

Taxes, Exemption and Credits

ON APRIL 22, 2026, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 2156, AS AMENDED.

What This Bill Does

• ON APRIL 22, 2026, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 2156, AS AMENDED.
• AMENDMENT #1 rewrites the bill to, instead, make the following changes to present law for any financial institution that may credit against the sum total of the taxes imposed by the Franchise Tax law and by the Excise Tax law:  Three percent annually from the unpaid principal balance of a qualified loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund as of December 31 of each year for the life of the loan or 15 years, whichever is earlier, to the month-end average unpaid principal balance of a qualified loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund for the financial institution's fiscal year for the life of the loan or 15 years, whichever is earlier.
•  Five percent annually from the unpaid principal balance of a qualified low-rate loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund as of December 31 of each year for the life of the loan or 15 years, whichever is earlier, to the month-end average unpaid principal balance of a qualified low-rate loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund for the financial institution's fiscal year for the life of the loan or 15 years, whichever is earlier.
• This amendment also provides that an insurance company who makes a qualified loan or qualified long-term investment, or that makes a grant, contribution, or qualified low-rate loan to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund, is authorized a credit against the tax imposed by present law.

Limits and Unknowns

• This entry is temporarily using official source text because the generated explanation could not be confirmed against the official bill text during the last sync.

Official Summary Text

ON APRIL 22, 2026, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 2156, AS AMENDED.

AMENDMENT #1 rewrites the bill to, instead, make the following changes to present law for any financial institution that may credit against the sum total of the taxes imposed by the Franchise Tax law and by the Excise Tax law:



Three percent annually from the unpaid principal balance of a qualified loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund as of December 31 of each year for the life of the loan or 15 years, whichever is earlier, to the month-end average unpaid principal balance of a qualified loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund for the financial institution's fiscal year for the life of the loan or 15 years, whichever is earlier.


Five percent annually from the unpaid principal balance of a qualified low-rate loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund as of December 31 of each year for the life of the loan or 15 years, whichever is earlier, to the month-end average unpaid principal balance of a qualified low-rate loan made to a community development financial institution that is certified by the United States department of the treasury's community development financial institutions fund for the financial institution's fiscal year for the life of the loan or 15 years, whichever is earlier.

This amendment also provides that an insurance company who makes a qualified loan or qualified long-term investment, or that makes a grant, contribution, or qualified low-rate loan to a community development financial institution that is certified by the
United States department of the treasury's community development financial institutions fund, is authorized a credit against the tax imposed by present law.

The carry forward and limitation provisions in present law that apply to the credit are permitted, provided, that no credit allowed may exceed the insurance company's liability for the calendar year for which the credit is claimed, and no amount of credi
t is refundable. An authorized credit may be used in connection with both final payments and prepayments of the tax imposed by present law.

An insurance company claiming a credit is not required to pay any additional retaliatory tax levied solely as a result of claiming the credit. For purposes of applying present law, any reference to a taxpayer's tax year or fiscal year, or to the taxpaye
r's liability for taxes imposed are deemed to mean, respectively, the calendar year for which the tax imposed is reported and the insurance company's liability for the tax imposed.

This amendment provides that this bill takes effect January 1, 2027, and applies to tax years and calendar years beginning on or after that date.

ON APRIL 22, 2026, THE SENATE SUBSTITUTED HOUSE BILL 2156 FOR SENATE BILL 2151, ADOPTED AMENDMENT #1, AND PASSED HOUSE BILL 2156, AS AMENDED.

AMENDMENT #1 removes that a
n insurance company that makes a qualified loan or qualified long-term investment, or that makes a grant, contribution, or qualified low-rate loan, to a community development financial institution that is certified by the United States department of the t
reasury's community development financial institutions fund, is allowed a credit against the tax imposed by
present law
.

This amendment also removes that f
or purposes of applying
present law
, any reference to a taxpayer's tax year or fiscal year, or to the taxpayer's liability for taxes imposed by this part, are deemed to mean, respectively, the calendar year for which the tax imposed is reported and the insurance company's liability for the
tax imposed by
present law
.

This amendment revises the effective date's application by only applying it to tax years, not calendar years, beginning on or after January 1, 2027.

Current Bill Text

HOUSE BILL 2156
By Baum

SENATE BILL 2151
By Walley
SB2151
012094
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 67,
relative to tax credits.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. The department of revenue shall study the potential economic impact of
making all excise tax credits transferable to any person or entity, other than the person or entity
to whom or to which the credits are initially made. On or before December 15, 2026, the
department shall report its findings and recommendations to the finance, ways and means
committee of the senate and the committee in the house of representatives having jurisdiction
over tax-related matters.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it.