Beacon Impact

Protecting Full Expensing for Businesses in Tennessee

Full expensing, or bonus depreciation, is a tax policy that enables businesses of all sizes to deduct the full value of capital expenses in the year the expenditures are incurred rather than depreciating the assets over several years. These investments may be for equipment or infrastructure to support and expand their operations.

In 2023, Governor Bill Lee’s Tennessee Works Tax Act coupled state law with President Trump’s 2017 tax cut law, providing full expensing for businesses. This allowed Tennessee businesses to fully expense on their state excise taxes in addition to their federal taxes. However, this federal provision is phasing out before expiring in 2026. As a result, Tennessee businesses are also experiencing a phase-out of bonus depreciation on their state taxes.

With this legislation, Tennessee will decouple from federal tax law to prevent a further phase-out of the deduction and will work to restore it to 100 percent. This will benefit all Tennesseans by making our state more competitive, encouraging capital investment, and providing more high-quality employment opportunities.

Ask lawmakers to make Tennessee more competitive with better tax policies for businesses—click here to send a message now!

Status Update: The bill has been filed for the 2025 General Assembly as SB 32.

Want more information? Contact us anytime

SCOTT GILMER

Vice President of Policy and Advocacy
Scott.Gilmer@BeaconImpact.org

615-483-7802

STEPHANIE WHITT

Chief Operating Officer and Executive Vice President
Stephanie@BeaconImpact.org

(615) 556-7192