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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 & Use |
7% (some exclusions apply) |
2.75% |
| General Property* | None |
City: $2.39 per $100 Anderson: $2.35 per $100 Roane: $1.97 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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