Senate Bill 32 amends Tennessee Code Annotated, specifically Section 67-4-2006(a)(12), to update the regulations regarding the deduction for bonus depreciation for excise tax purposes. The bill introduces new provisions for assets purchased between January 1, 2023, and January 1, 2026, allowing taxpayers to apply Section 168 of the Internal Revenue Code as it stands under the Tax Cuts and Jobs Act of 2017. For assets acquired on or after January 1, 2026, taxpayers will have the option to deduct 40% of the cost of depreciable assets in the year of purchase.

Additionally, the bill stipulates that if the federal government increases the bonus depreciation percentage above 40% after January 1, 2026, taxpayers may elect to deduct the higher percentage as implemented by the federal government. This amendment aims to align state tax regulations with federal provisions, thereby providing clarity and flexibility for taxpayers regarding depreciation deductions. The act will take effect upon becoming law.

Statutes affected:
Introduced: 67-4-2006(a)(12), 67-4-2006