Exemptions and Credits

You can file for an exemption using the Tennessee Taxpayer Access Point (TNTAP), without creating a logonVisit TNTAP for more information.  

Seventeen different types of entities are exempt from the franchise and excise taxes.   

  1. Industrial Development Corporations
  2. Masonic lodges and similar lodges
  3. Regulated Investment Companies owning 75% in United States, Tennessee, or local bonds
  4. Federal and state credit unions
  5. Venture Capital Funds
  6. Farming / personal residence in LLCs or LPs
  7. LLCs or LPs that acquire receivables from an affiliate that reported the income in TN
  8. LLCs or LPs that provide affordable housing and receives Low-Income Housing Credits 
  9. LLCs or LPs where the members are fully-obligated for the debts of the entity (OME)
  10. Partnership, trust, REMIC, or FASIT that has asset-backed security of debt obligations
  11. Family Owned Non-Corporate Entity (FONCE) (see the Exemption – FONCE page for additional information)
  12. LLC, LP, or business trust organized as a Diversified Investing Fund
  13. Tennessee historic property preservation entities
  14. Insurance companies
  15. TN Investco entity that receives investment credits under Tennessee Small Business Act
  16. Any entity owned in whole or part by the Armed Forces and has 50% of income from property primarily for benefit of members of Armed Forces
  17. Qualified Low-Income Community Historic Structure

Entities 5-12 and 16-17 listed above must file an application for exemption on form FAE 183, Application for Exemption/Annual Exemption Renewal in order to receive the exemption.  Thereafter, they must annually certify that they continue to be eligible for the exemption.  Both the initial application and the annual renewal are filed on form FAE 183.  Note that entities 6 and 11 must complete page three of the form to disclose their activity in the state. This form with the appropriate sections completed must be submitted by the 15th day of the fourth month following the close of the entity’s taxable year.  Entities requesting an extension for federal income tax are automatically granted an extension.