Taxes & Incentives

Taxes

The Greater Chattanooga Region offers an incredibly business-friendly atmosphere at remarkably low costs. The region has one of the nation’s lowest per capita tax burdens, low sales and income tax rates and no state property tax.

States with the Top Business Climates:

#1 Georgia
#7 Tennessee
#9 Alabama

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The primary business taxes in the Greater Chattanooga Region are listed below, organized by state.

	Alabama	Georgia	Tennessee
Corporate Income Tax Rate	Corp. income tax rate: 6.5% Business Privilege Tax Rate: $0.25 to $1.75 per $1,000 of net worth	Corp. income tax rate: 6% Corp. Net Worth Tax range: $125 to $5,000 Depending on net worth: $100,000 to $22 million	Corp. income tax rate: 6.5% Franchise Tax: 0.25% of the greater of net worth or real and tangible property in Tenn.
Sales & Use Tax	State rate: 4% Local rates range from: 1% to 7%	State rate: 4% (0% on food) Local rates range from: 0% to 5%	State rate: 7% (4% on food) Local rates range from: 1.5% to 2.75%
Inventory Tax	None	None	None
Personal Income Tax	2% to 5% 3 brackets	1% to 6% 6 brackets	No state personal income tax. Hall Income Tax (1%) on interest from bonds/notes and stock dividends
Property Tax	No state property tax Locally assessed, rates apply per $1,000 of 10% assessed value	No state property tax Locally assessed, rates apply per $1,000 of 40% assessed value	No state property tax Locally assessed, rates apply per $100 of: 40% assessed value (real); 30% assessed value (personal)
Manufacturing Fuels Sales Tax	State rate: 4.00% Local rate: 1%	State rate: 0% Local: 1% for education	None - if direct contact with product is made during mfr. and a separate meter is used.
Residential Electricity Sales Tax	4%	State rate: 4% Individual local rates apply	None
Residential Natural Gas Sales Tax	4%	State rate: 4% Individual local rates apply	None
Workers' Compensation ₍₂₀₁₇₎	$0.74 per $100 of covered wages	$0.64 per $100 of covered wages	$0.49 per $100 of covered wages
Unemployment Insurance ₍₂₀₁₉₎	Taxable wage base: $8,000 New employer rate: 2.7% Experience rate range: 0.65% to 6.8%	Taxable wage base: $9,500 New employer rate: 2.7% Experienced rate range: .04% to 8.1%	Taxable wage base: $7,000 New employer rate: 2.7% Experienced rate rage: 0.01% to 10.0%

Tax Credits

Incentive programs for business expansion and job creation are available throughout our region in the form of infrastructure development grants, training grants and reduced land costs.

Many lucrative business tax credits are available to relocating and expanding companies, including:

Jobs tax credits to reduce corporate tax liability
Reduced utility taxes
No property taxes on inventoried finished goods
No property taxes on government-required pollution control equipment
No or reduced property taxes on goods-in-process
Reduced sales and use taxes for industrial machinery and equipment

Utility credits are also available throughout the region to qualifying power customers.

“Chattanooga is among the Top 40 “Best for Business Cities”
- MarketWatch

Local Incentives

Our region does not take a “one size fits all” approach and evaluates and changes its local incentive offerings often to meet the needs of business in the current economic environment. As such, individual counties throughout the region offer property tax abatements that allow qualified businesses to substantially reduce their local property taxes for new investments in real and personal property.

When offering local incentives to qualified projects, the Greater Chattanooga Economic Partnership evaluates the following inputs:

New investments in real and personal property

Net new jobs created

Average wages

To receive a customized incentive package for your project, please contact Lindsay Hiatt, Project Manager for the Greater Chattanooga Economic partnership at lhiatt@greaterchatt.com.