Are state and local tax incentives and grants included in net earnings for excise tax purposes?

State and local tax incentives and grants are not included in net earnings for excise tax purposes.  For tax years beginning or after January 1, 2017, Tennessee decoupled from the provision of the federal Tax Cut and Jobs Act of 2017, which expands gross income to include certain state and local tax incentives and grants through I.R.C. § 118. For calculating net earnings and net losses, taxpayers that include these incentives and grants in federal taxable income must subtract that amount from Tennessee net earnings and net losses.

 

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