One State Is Sending Out $10,000 Refunds: Here's Who Qualifies

Tennessee is sending out $10,000 refunds to many businesses after the state finally passed a business tax cut and refund.

Up to 100,000 businesses could be eligible for the refund, and a revenue department report revealed around half of those rebates would go to companies in state while 53 percent of the refund money would go to businesses out of state.

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Businesses will have to request the refunds themselves, and the government will release a public list outlining which businesses applied and received refunds. The actual amount of the refund issued, however, won't be made publicly available.

There are certain ranges businesses can expect to receive, though. That includes $0 to $750, $751 to $10,000 and $10,000 plus.

"The refund comes after much discussion at the state level of how far back such a refund would go," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek. "The proposal would make up to three years of the Franchise and Excise tax refundable. Any business who paid the tax could apply for a refund."

Republican Gov. Bill Lee previously said he planned to change the Franchise and Excise Tax, which is in place for businesses across the state. He has to sign the rebate for it to go into effect.

Newsweek reached out to Lee for comment.

After concerns were raised that businesses might threaten legal action when the updated tax went into effect, Lee said he planned to implement both a tax cut and refund for businesses that goes as far back as three years.

Tennessee Democrats were in staunch opposition to the move, saying the funds would be better used if they went toward funding education and health care initiatives.

"Do you know how many roads in your district $1.5 billion will create? Do you know how many teachers you could hire for $1.5 billion? Do you know how many people you could put on health care with 1.5 billion dollars? What are we doing here folks? We're giving away $1.5 billion out of fear," State Rep. Bo Mitchell, D-Nashville, said.

"If we pass this bill, if you vote for this bill, I don't want to hear the word fiscal conservative come out of your mouth because there is nothing fiscally conservative or fiscally responsible about a $1.7 billion handout," State Rep. John Ray Clemmons, D-Nashville, said according to NewsChannel5 Nashville.

Republicans and Democrats had a number of debates before passing the refunds to businesses for up to three years of the Franchise and Excise Tax.

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"Voting in favor of this is voting in favor of cutting almost 2 billion dollars out of taxes and putting it right back into small businesses," GOP state House Majority Leader William Lamberth, R-Portland, told NewsChannel5 Nashville. "I am eager to get their money back into their pockets—so they can give raises to their employees, they can give bonuses to their employees, they can buy new pieces of equipment which I'm sure some of these businesses in your district and in mine, would certainly appreciate the ability to do."

Up to 100,000 businesses could be eligible for the refund, and a revenue department report revealed around half of those rebates would go to companies in state while 53 percent of the refund money would go to businesses out of state.

According to finance expert Michael Ryan, who runs michaelryanmoney.com, the biggest beneficiaries would likely be major corporations like FedEx, HCA Healthcare and Volkswagen, which have huge assets and operations in the state. County property records suggest many of them would be in line for multi-million-dollar refunds.

"Refunds and tax credits aimed at attracting or retaining businesses can be a double-edged sword," Ryan told Newsweek. "On one side, they can spark investment, job growth and shore up a state's competitiveness. But they also drain funds that could go towards other priorities like education, infrastructure or social services."

Businesses will have between May 15 and November 30 to apply for the rebates available.

"Ultimately, this could be a boost to Tennessee businesses dealing with increasing costs," Beene said. "Having some money in the form of a refund could provide some needed additional funds in the current economy."