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Tennessee Governor Signs Foreign Income Exemption

May 10, 2019, 3:50 PM

Tennessee businesses can largely skip paying state taxes on two new foreign income categories under legislation Gov. Bill Lee (R) signed into law.

  • S.B. 558, which deals with the state’s excise tax on corporate earnings, is Tennessee’s latest response to federal tax code changes.
  • The new state law lets taxpayers deduct global intangible low-taxed income (or GILTI) and foreign income amounts deemed repatriated under new federal code Sections 951A and 965(a), respectively.
  • Taxpayers must add back 5 percent of each income category—a move aimed at preventing taxpayers from shifting income overseas undetected. Connecticut and Massachusetts have comparable policies. ...