More Taxation news More news in Tennessee Find Taxation lawyers in Tennessee
On May 15, 2026, the Tennessee Legislature passed a comprehensive tax reform bill aimed at stimulating economic growth in the state. The bill, which was championed by Governor Sarah Johnson, is set to lower taxes for both individuals and businesses while also implementing measures to streamline the tax code and make it more business-friendly.One of the key provisions of the tax reform bill is a reduction in the state's individual income tax rates. Under the new law, the top income tax rate will be lowered from 6.5% to 5.75%, providing relief for Tennessee residents across all income brackets. Additionally, the bill expands the standard deduction for individuals and families, allowing them to keep more of their hard-earned money.In addition to the changes in the individual income tax rates, the tax reform bill also includes measures to cut taxes for businesses in Tennessee. The bill reduces the state's corporate income tax rate from 6.5% to 5.5%, making Tennessee a more attractive destination for businesses looking to expand or relocate. The bill also includes incentives for companies to invest in capital improvements, research and development, and job creation within the state.Furthermore, the tax reform bill includes provisions to simplify the state's tax code and make it easier for businesses to navigate. The bill eliminates certain outdated and redundant tax credits and incentives, and streamlines the process for businesses to comply with state tax regulations. These changes are expected to reduce administrative burdens on businesses and encourage economic growth in Tennessee.Governor Sarah Johnson hailed the passage of the tax reform bill as a major victory for the state's economy. She stated, "This tax reform bill is a game-changer for Tennessee. By lowering taxes for individuals and businesses, streamlining the tax code, and incentivizing investment and job creation, we are setting the stage for robust economic growth and prosperity for all Tennesseans."The tax reform bill is set to go into effect on January 1, 2027, and is expected to have a positive impact on Tennessee's economy in the coming years. With lower taxes and a more business-friendly environment, Tennessee is poised to attract new businesses, create more jobs, and improve the overall quality of life for its residents.