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Taxes & Incentives ~ Tax Structure

LOCAL TAX STRUCTURE

Oak Ridge businesses have one of the lowest per capita tax burdens in the U.S. There is no state tax on personal income or property and several tax incentives help companies to operate more profitably.

Tax	Tennessee	Oak Ridge
Corporate Excise	6.5%	None
Franchise	$0.25 per $100	None
Sales and Use	7% (some exclusions apply)	2.75%
General Property*	None	City: $2.77per $100 Anderson: $2.82 per $100 Roane: $2.63 per $100
Personal Income	No tax on earned income; 6% on interest, and stock or bond dividends	None
Initial Corporate Organization Fee	$100 - $600	None
Unemployment Insurance	2.7% new employers	None

* Ratio Assessment:

Residential 25%
Industrial 40%
Personal (Equipment) 30%

TENNESSEE STATE TAX STRUCTURE

Franchise Tax

Finished goods inventory in excess of $30 million may be excluded
Pollution control equipment is exempt
Property under construction and not being utilized is not included
Property rented from the industrial development corporation may be valued by capitalizing it on the books

Excise Tax

Tax is based on the net earnings of the company derived from the business in Tennessee
Tax rate is 6.5%
All capital losses claimed in the year incurred
Net operating losses can be carried forward for 15 years
Three factor, double weighted apportionment formula
Tennessee does not have the throwback provision

Property Tax

No state property tax

Sales and Use Tax

· 7% state sales tax plus the applicable local rate (2.25%-2.75%) on any person or company who manufactures, distributes or sells tangible personal property within the state.

No sales tax is levied on:

No sales tax on purchases, installation and repairs of qualified industrial machinery
No sales tax on raw materials for processing
No sales tax on pollution control equipment for manufacturers
Reduced sales tax rates for manufacturers' use of energy fuel and water (1.5% vs. 7%)
No sales tax on qualified industrial supplies.
No sales tax on containers, packaging and wrapping materials
No state tax on personal income

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