Business Environment

Location, Location, Location! The Scott County area allows for tremendous growth in the business sector. Learn why...

Scott County and Tennessee

- Tennessee is a right-to-work state
- Tennessee's proximity to 2/3 of U.S. population
- Tennessee's 1994 union membership for all industries/manufacturing is lower than the national average:
           Tennessee........ 11.9%/18.0 mfg
           United States.... 15.5%/18.2 mfg
- Tennessee's 1994 population of 5,175,240 represents a 6.1% increase over the 1990 census
- Tennessee has the second largest inland port in the United States on the Mississippi River in Memphis
- Tennessee has over 200 Fortune 500 industrial and service companies within state facilities
- Tennessee's Constitution requires a balanced state budget
- Tennessee has no personal income tax on wages
- Tennessee is located in the Sunbelt area of the Southeastern U.S. and has a mild year round climate

Tax Structure

- Scott County property tax $2.67 (per $100 assessed value)
- Sales Tax 7% state
- Local sales tax 2.25%
- Income Tax
- Personal: 6% on Interest and Dividends
- Corporate (Excise): 6% of Net Earnings
- Franchise Tax: 25 cents per $100 of Capital Properties
- Unemployment Tax - New Employers: 2.7% of first $7,000

Sales and Use Tax:

No sale tax on:

- Purchases, installation and repairs on qualified industrial machinery
- Purchases of material handling and racking equipment associated with the required capital investment of $10 million by a distribution or warehouse facility.
- Raw material for processing
- Reduced sales tax rates for manufacturer's use of energy fuel and water. Tax-exempt is used directly in manufacturing process.
- Headquarters Tax Credit. Reduction of sales tax from 7 percent to 0.5 percent on building materials, machinery and equipment used in the construction of remodeling of a qualified headquarters facility.
- Refund on taxes paid on goods and services by motion picture production companies filming or producing in Tennessee. Requires expenditures of $500,000.

Property Tax

No property tax on:

- Work-In-Progress
- Finished-good inventories in hands of maunfacturer
- Inventories of merchandise for sale.

Corporate Excise

- Excise tax credit equal to 1% of the purchase price of qualified industrial machinery
- Excise tax credit equal to 1% of the purchase price of equipment associated with the required capital investment by a distribution or warehouse facility.
- Net operating loss carry forward of 15 years
- All capital losses can be claimed in the year incurred.

Franchise

Jobs Tax Credit:

Jobs tax credit of $2,000-$4500 in special opportunity counties (which Scott County is) for each new full-time employee for qualified business enterprises that create 25 new jobs and make an additional captial investment of $500,000 in the fiscal year. Credit may also be taken for new jobs in the future resulting in a net increase in jobs.

The jobs tax credit can be applied to both the franchise and excise tax. The percentage of franchise an excise tax liability offset allowed ranges from 33 1/3 percent to 100 percent for total employment in Tennessee, ranging from less than 1,000 to 5,000 or more.

- Finished goods inventory in excess of $30 million may be excluded from the franchise tax.
- Property under construction, not being utilized by the business is excluded from the franchise tax.
- Property rented from an industrial development board may be capitalized on the business books.
- Pollution control equipment is exempt from the franchise tax.