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
#4 Tennessee
#9 Alabama

Site Selection Magazine, 2016


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

 

Alabama   

Georgia

Tennessee

Corporate Income Tax Rate

  • Franchise Fee: 6.5%
  • Business Privilege Tax Rate: $0.25 to $1.75 per $1,000 of net worth
  • Franchise Fee: 6%
  • Corp. Net Worth Tax range: $10 to $5,000
  • Depending on net worth: $0 to $22 million
  • Franchise Fee: 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: 0.0% to 6.5%
  • State rate: 4%
  • Local rates range from: 2% 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 (6%) on interest from bonds/notes and stock dividends

Property Tax

  • No state property tax
  • Locally assessed, rates apply per $1,000 of 20% 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

4.00%

None

1.50%

Electricity Sales Tax

None

4.00%

7.00%

Natural Gas Sales Tax

None

None

7.00%

Telephone Service Sales Tax

  • 7% state, 2.5% flat local (intrastate)
  • 7.5% (interstate or international)
  • Exemptions available for call centers that meet criteria.
  • 7% state, 2.5% flat local (intrastate)
  • 7.5% (interstate or international)
  • Exemptions available for call centers that meet criteria.
  • 7% state, 2.5% flat local (intrastate)
  • 7.5% (interstate or international)
  • Exemptions available for call centers that meet criteria.

Workers' Compensation (2014)

$0.87 per $100 of covered wages

$0.79 per $100 of covered wages

$0.61 per $100 of covered wages

Unemployment Insurance (2017)

  • 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: $8,000
  • 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.


Successfully added to report.