Tennessee Headquarters Sales/Use Tax Credit

Tennessee Headquarters Sales/Use Tax Credit

Provides state sales and use tax relief in Tennessee for headquarters projects tied to capital and staffing growth.

Eligibility · United States · US-TN

The Tennessee Headquarters Sales and Use Tax Credit is a refundable credit administered by the Tennessee Department of Revenue that reimburses state sales and use taxes paid on construction materials, machinery, equipment, furniture, fixtures, and computer software used in a qualified Tennessee headquarters facility. The credit covers all state sales and use tax except the 0.5% supplemental rate, yielding an effective refund of approximately 6.5 percentage points of the 7% state rate on qualifying purchases. Two threshold requirements must be met: a minimum capital investment of $10 million in building and qualified tangible personal property during the investment period, and the creation of at least 100 net new full-time headquarters staff positions.

For software, the qualifying rule is that it must be used primarily (rather than exclusively) in the headquarters facility. The credit is formally applied for through TN DOR using a structured application that includes an investment plan and documentation of net new job creation. Applicants must be subject to Tennessee franchise and excise tax — entities without F&E liability are ineligible. The Headquarters Tax Credit is distinct from the job tax credit family in that it offsets sales and use tax rather than F&E liability, making it complementary to rather than duplicative of the Standard, Enhanced, or Super Job Tax Credits.

The programme is sector-agnostic but, by design, relevant only to businesses establishing or substantially expanding a qualifying headquarters facility in Tennessee. There is no stated deadline cycle or competitive allocation — the credit is available on a rolling basis to eligible companies that meet the investment and employment thresholds and complete the required TN DOR application.