REPORT: Dozens of Billion-Dollar Corporations Pay Little or Nothing in Tennessee Taxes

‘Corporate Tax Loophole Report’ by Sen. Oliver, Rep. Behn explores consequences of corporate tax avoidance

NASHVILLE — Dozens of billion-dollar businesses in Tennessee are paying little to nothing in corporate taxes, according to state tax data released in a new report by Sen. Charlane Oliver (D-Nashville) and Rep. Aftyn Behn (D-Nashville).

The Tennessee Corporate Tax Loophole Report examines corporate tax data from 2019 to 2022 and provides a deeper look at corporate tax avoidance in the Volunteer State. Due to state laws that prevent the public from knowing what corporations pay in taxes, the information shared by revenue officials does not identify individual companies, nor their tax bills. But it does show whether high-income corporate taxpayers paid something — or nothing — on their Franchise and Excise tax bill for the last four years for which there is complete data.

“Every Tennessean contributes to the state budget through various fees, the gas tax and, of course, the state’s 7% sales tax,” the report begins. “But what about corporations? New state tax data shows that a large share of companies are dodging Tennessee’s primary corporate taxes altogether.”

The data, provided by the Tennessee Department of Revenue, reveals that 40% of all companies pay only the $100 minimum on Tennessee’s corporate Franchise Tax and a whopping 63% of companies on average are dodging Tennessee’s corporate income tax, called the Excise Tax.

“There are even dozens of billion-dollar corporations paying little to nothing in state taxes!” the report says.

Multimillion dollar companies are in on it, too. The data shows that 24% of all companies with income over $50 million paid zero or less on their Excise Tax bill and 12% of all companies in the same income category paid only the $100 minimum on the corporate Franchise Tax.

The authors point to foreign tax havens as a loophole being utilized by high-income corporations to hide taxable profits overseas and minimize their state tax bills.

“Hiding income in foreign tax havens is one way a corporation with more than $1 billion in income avoids paying corporate taxes in Tennessee,” the report says. “These tax-avoidance schemes deprive our state of funds needed to invest in education, infrastructure, and public safety. By allowing these practices to go unchecked, Tennessee effectively subsidizes big corporations at the expense of small businesses and hardworking families who pay their fair share.”

Sen. Oliver and Rep. Behn released the tax avoidance report as part of their joint effort to cut costs for working families by responsibly repealing Tennessee’s tax on groceries. Their proposal to end the grocery tax includes replacement revenue from closing foreign tax shelters and ensuring high-income corporations pay their fair share.

“The path forward lies in adopting a fairer approach — closing corporate loopholes, ensuring large businesses pay their share, and providing meaningful relief for low- and middle-income Tennesseans — to support better schools, modern infrastructure, and accessible healthcare,” the report says.

Review the research in the report:

• “Corporate Tax Data Request,” Revenue Department, October 2024
• “Fact Sheet: Tennessee is a low-tax state; however, working families are paying more than their fair share,” Think Tennessee, April 2024
• “Tennessee: Who Pays?,” Institute on Taxation and Economic Policy, January 2024
• “State Revenue Collections: November 2024,” Fiscal Review Committee, December 2024
• “States Can Fight Corporate Tax Avoidance by Requiring Worldwide Combined Reporting,” Center for Budget and Policy Priorities, March 2024