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SB 2151

Taxes, Exemption and Credits - As introduced, requires the department of revenue to study the potential economic impact of making all excise tax credits transferable to any person or entity, other than the person or entity to whom or to which the credits are initially made; requires the department to report to the finance, ways and means committee of the senate and the committee in the house of representatives having jurisdiction over tax-related matters by December 15, 2026. - Amends TCA Title 67.

114th Regular Session (2025-2026) Introduced by Page Walley

Tennessee would study whether all excise tax credits could be transferable to anyone else, with findings due by December 15, 2026.

Recommended for passage with amendment/s, refer to Senate Calendar Committee Ayes 11, Nays 0 PNV 0
#exemptionandcredits #taxes
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Bill Summary · SB 2151

Summary of Bill SB 2151 (HB 2156) – Tennessee, 114th General Assembly

Basic information

  • Title: Taxes, Exemption and Credits
  • Sponsor: Sen. Walley (Co-sponsor: Rep. Baum, Rep. Page Walley)
  • Jurisdiction: Tennessee
  • Introduced as: SB 2151 / HB 2156
  • Section affected: Amends Tennessee Code Annotated, Title 67 (tax credits)
  • Effective date: January 1, 2027 (applies to tax years beginning on or after that date)

Purpose and intent

  • The bill directs the Department of Revenue (DOR) to study the potential economic impact of making all excise tax credits transferable to any person or entity, except the original recipient of the credit.
  • The study would assess the wider economic effects of transferable excise tax credits and report findings and recommendations to the Senate Finance, Ways, and Means Committee and the House committee with jurisdiction over tax matters by December 15, 2026.

Key provisions and changes

  • New study mandate (Section 1):

    • DOR must conduct a study on the potential economic impact of allowing transferability of all excise tax credits.
    • Transferability would apply to credits currently issued to a specific person or entity, with the transferee being any other person or entity.
    • DOR must submit findings and recommendations to the relevant Senate and House committees by December 15, 2026.

  • Effective date (Section 2):

    • The act becomes law upon approval, with the public welfare requiring it language.

  • Amended provisions (as referenced in fiscal notes for amended version):

    • A later fiscal memorandum (SB 2151 – HB 2156, amended 014741) indicates a broader related set of changes to community investment credits and gross premium tax credits:
    • Changes the base calculation for community investment credits for financial institutions from a percentage of unpaid principal balance (UPB) to a percentage of month-end average unpaid balance for loans to Fund-certified Community Development Financial Institutions (CDFIs).
    • Adds a new credit against the gross premium tax for insurance companies making qualified loans, long-term investments, grants, contributions, or qualified low-rate loans to Fund-certified CDFIs.
    • Applies the above changes starting January 1, 2027, for tax years beginning on or after that date.
    • The accompanying fiscal note notes uncertainty about the net revenue impact due to multiple variables and credits the Department of Revenue (DOR) and Department of Commerce and Insurance (DCI) can implement these changes with existing resources.

Who and what is affected

  • State agencies:
    • Department of Revenue (DOR): tasked with conducting the transferability study and reporting results.
    • Department of Commerce and Insurance (DCI): would administer the new gross premiums tax credit aspect and related changes.
  • Tax entities and credits:
    • Excise tax credits currently issued to individual recipients would become transferrable to other persons or entities (potentially broadening transferability beyond the original recipient).
    • Financial institutions with community investment credits related to loans, investments, grants, or contributions to Fund-certified CDFIs: credits would be calculated using month-end average unpaid balances for the applicable period (for those loans to Fund-certified institutions).
    • Insurance companies: could earn a credit against gross premiums tax for qualifying financial activities supporting Fund-certified CDFIs.
  • Tax years and implementation:
    • The transferability study must be completed by December 15, 2026.
    • The amended provisions (for the credit bases and new gross premium tax credit) take effect for tax years beginning on or after January 1, 2027.

Fiscal and revenue considerations

  • Fiscal impact (initial): Not significant for the transferability study itself; DOR can perform the study with existing resources.
  • Fiscal impact (amended provisions): The amended bill introduces new or adjusted credits and changes the bases for computing certain credits, with uncertain revenue impact beginning in FY 2027-28.
    • Estimated impact is unknown due to multiple variables (loan balances, timing of loans, utilization of credits, and premium tax receipts).
    • The fiscal notes emphasize potential revenue effects depend on loan activity, premiums, and credits claimed.

Procedural timeline and status

  • Committee actions: Multiple hearings and referrals culminating in the bill moving through Senate Finance, Ways, and Means (F&W&M) with amendments and negative recommendations at certain stages.
  • Key dates from actions:
    • February–April 2026: Introduced, referred, and considered in Senate committees; amended versions discussed.
    • December 15, 2026: Deadline for DOR to report its study findings.
  • Current status (as of the provided documents): Pending committee consideration and vote; the amended version has broader tax credit provisions and an effective date of January 1, 2027.

Bottom line

  • The core bill, SB 2151, asks the DOR to study whether excise tax credits should be transferable to any other person or entity and to report by late 2026. A later amended version expands and redefines certain community investment and gross premium tax credits, moving to a January 1, 2027 effective date for those changes. The overall fiscal impact is uncertain, with potential for both revenue increases and decreases depending on how credits are utilized and how loan and premium activities evolve.

Compiled from official sources — confirm details with the bill’s official record.

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