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Tennessee Tax Bill Exempting Foreign Income Heads to Governor

April 22, 2019, 10:14 PM

Tennessee business taxpayers could exclude certain foreign income from the state’s business excise tax under a bill that further decouples state law from the latest federal tax code.

S.B. 558 would largely exclude global intangible low-tax income (or GILTI)—a new category of income that aims to bring foreign-earned income back to the U.S.—as well as the transition tax on foreign earnings when calculating Tennessee taxable income—references to federal tax code sections 951A and 965(a). The legislation, however, requires adding back 5 percent of the relevant earnings in each category.

The state House passed the bill April 22 by ...