Tennessee will not follow the business interest deduction or the capital contributions changes in the federal Tax Cuts and Jobs Act (TCJA).
Business Interest Deduction
The TCJA limit on deducting business interest will not apply to Tennessee for tax years beginning after 2019.
Instead, for those years, Tennessee will follow IRC §163(j) as it existed before enactment of the TCJA.
Contributions To Capital
Tennessee will not follow the TCJA provision limiting the exemption for contributions to capital.
For Tennessee, governmental entity or civic group nonshareholder contributions are still exempt.
Taxpayers can subtract amounts they would have excluded under IRC §118 before the TCJA. This applies to tax periods beginning after 2016.
Ch. 1011 (S.B. 2119), Laws 2018, effective as noted