Tennessee Department of Revenue explains franchise and excise tax exemption for low‑income historic structures

Meagan Choate of the Tennessee Department of Revenue delivered a webinar explaining state franchise and excise tax exemptions available to entities that own or lease qualified low‑income community historic structures and the steps required to claim the exemption.

Choate said the state exemption is governed by Tennessee Code Annotated section 67‑4‑2008 and requires federal approval under Internal Revenue Code section 26. "You must file the Application for Exemption/Annual Exemption Renewal Form FAE 183 to receive the exemption," Choate said, adding that both initial and renewal applications "must be submitted annually on form FAE 183 by the fifteenth day of the fourth month following the entity’s year end."

The department described the qualifying entity as one whose operations and assets consist solely of its investment in or lease of the qualified low‑income community historic structure, with only incidental business operations related to that investment. Choate warned that if an entity does not meet the exemption requirements in any given year, "it is taxable on all activities for that year."

On filing mechanics, Choate said a completed franchise and excise return (Form FAE 170) must be filed electronically and any taxes paid by the same deadline: the 15th day of the fourth month after the entity's year end. She noted a $200 penalty "may [be] assessed" for failure to timely file an application for exemption or renewal. The department also explained that entities that request a federal income tax extension are automatically granted an extension for Tennessee franchise and excise tax if the filer checks the box on the state form indicating a federal extension.

Choate pointed listeners to the department's guidance materials and forms: Form FAE 183 (Application for Exemption/Annual Renewal), Form FAE 170 (franchise and excise return), the franchise and excise tax manual, and Tennessee Code Annotated 67‑4‑2008. She recommended applicants attach a copy of the federal approval received under section 26 of the Internal Revenue Code when submitting the exemption application.

For further help, Choate provided the department's contact options: website tn.gov/revenue, email revenue.support@tn.gov, and social channels; telephone assistance is available Monday–Friday, 8:00 a.m. to 4:30 p.m. Central Time at 615‑253‑0600 (general line) or 615‑253‑0700 for franchise and excise questions. The webinar supplemental PDF in the department's Webinar Video Library also contains links to the cited forms and guidance.

The department closed the presentation after answering procedural questions and directing viewers to the posted materials for detailed instructions.