TN Taxpayer Relief: December 2023 Storms

Tennessee Franchise & Excise Tax Relief:

In January of 2024 the Tennessee Department of Revenue released guidance in Important Notice #24-01 regarding state tax filing extensions for those affected by the December 9, 2023, tornadoes and storms in parts of Tennessee.  The extension applies to all taxpayers located in any disaster area designated by the Federal Emergency Management Agency (FEMA), which currently includes Davidson, Dickson, Montgomery, and Sumner counties.

Consistent with the IRS’s decision to extend federal deadlines for taxpayers affected by the December 9, 2023, storms, the Tennessee Department of Revenue extended franchise and excise tax filing and payment deadlines to June 17, 2024.  The tax relief postpones the franchise and excise tax filing and payment deadlines that occur starting December 9, 2023. Affected businesses and individuals will now have until June 17, 2024, to file returns and make any payments (including quarterly estimated payments) originally due during the period.

The department will automatically apply these extensions to franchise and excise tax accounts of taxpayers with a primary address on record with the department in the designated disaster area. Penalties and interest will not be applied to returns filed and payments made on or before this extended due date.  These extensions will not alter due dates or extend due dates that otherwise fall after June 17, 2024.

Tennessee Sales Tax Relief:

In addition, Tennessee residents impacted by these storms are potentially eligible for sales tax refunds on home appliances, home furniture and home building supplies. To be eligible the residents must be receiving financial assistance from FEMA for the repair, replacement or construction of their primary home that was damaged or destroyed in the natural disaster. To receive a sales tax refund, the taxpayer must file a claim with the Department of Revenue up to a year from the date on the FEMA decision letter. Eligible items include major appliances purchased for $3,200 or less, furniture purchased for $3,200 or less, and residential building supplies purchased for $500 or less. The maximum amount of refund available to any one residence is $2,500.

Tennessee Other Business Tax Filing Relief:

Tennessee sales and use tax returns and other business tax returns have not been automatically extended by the department, but the department has indicated it will approve on a case-by-case basis, extension requests from taxpayers who are unable to file returns for other taxes because of the impact of the December storms. Requests for these extensions can be sent to the department dedicated email account at Revenue.DisasterExtension@tn.gov.

IRS Federal Relief:

Internal Revenue Service release IR-2023-250, issued December 22, 2023, provided tax relief for individuals and businesses in Tennessee impacted by the storms that began on December 9, 2023. These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments. Individuals and households that reside or have a business in Davidson, Dickson, Montgomery, and Sumner counties qualify for tax relief.

The June 17, 2024, deadline will now apply to:

• Individual income tax returns and payments normally due on April 15, 2024. The IRS urges anyone who needs an additional tax-filing extension, beyond June 17, for their 2023 federal income tax return to request it electronically by April 15. Though a disaster-area taxpayer qualifies to request an extension between April 15 and June 17, a request filed during this period can only be submitted on paper. Whether requested electronically or on paper, the taxpayer will then have until October 15, 2024, to file, though payments are still due on June 17, 2024.
• 2023 contributions to IRAs and health savings accounts for eligible taxpayers.
• Quarterly estimated income tax payments normally due on January 16 and April 15, 2024.
• Quarterly payroll and excise tax returns normally due on January 31 and April 30, 2024.
• Calendar-year partnership and S corporation returns normally due on March 15, 2024.
• Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024.
• Calendar-year tax-exempt organization returns normally due on May 15, 2024.

In addition, penalties for failing to make payroll and excise tax deposits due on or after December 9, 2023, and before December 26, 2023, will be abated as long as the deposits are made by December 26, 2023. The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

Additional federal tax relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time—up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file)—to make the election. For individual taxpayers, this means October 15, 2024.

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