Tennessee: Governor Signs Bill Addressing GILTI and 965 Income

On May 13, 2019, Governor Bill Lee signed Senate Bill 558 into law. This bill makes changes to Tennessee’s excise tax laws to address the taxation of GILTI and section 965 income. First, the bill adopts a subtraction for any amount included in federal taxable income under IRC section 951A. Another new subtraction applies to any amount included in federal taxable income under IRC section 965(a). Both of these subtractions are allowed only to the extent that the amount is otherwise included in net earnings or losses, as defined under Tennessee law. Senate Bill 558 also provides for an addition to net earnings equal to five percent of the amount included in federal taxable income under IRC section 951A before the section 250 deduction. Another addition is required for five percent of the amount included in federal taxable income under IRC section 965(a) before the section 965(c) deduction. These changes apply to all tax periods beginning on or after January 1, 2018. Please contact John Harper at 615-744-2170 with questions on Senate Bill 558.