Bill > HB0635

This bill proposes an amendment to Tennessee tax law that provides taxpayers with more flexibility in calculating their net earnings for tax purposes. Specifically, the bill allows taxpayers to voluntarily add back certain deductions that were previously taken from their federal taxable income when calculating their state net earnings. Taxpayers can make these discretionary additions, adjustments, or removals on any timely filed original or amended tax return, with one key restriction: these adjustments cannot reduce the taxpayer's net earnings below what they would have been without making such additions. The bill also requires the Tennessee Department of Revenue to conduct a study on the economic impact of these authorized adjustments to net earnings and net losses, and if such a study is performed, to report its findings and recommendations to the appropriate legislative committees by January 1, 2026. The legislation will take effect immediately upon becoming law.

Budget and Finance

https://wapp.capitol.tn.gov/apps/Billinfo/default.aspx?BillNumber=HB0635&ga=114