Tennessee and the R&D Tax Credit

Tennessee does not offer a state-specific Research and Development (R&D) tax credit, meaning businesses operating within the state cannot claim a credit against state taxes for qualifying R&D activities. However, Tennessee is home to a variety of thriving industries, including automotive manufacturing, healthcare, music and entertainment, logistics, and advanced technology, all of which frequently engage in innovative practices and technological advancements. Despite the lack of a state R&D credit, businesses in these industries may still qualify for the federal R&D tax credit, which provides a significant incentive for companies investing in research and development.

The federal credit can help offset costs related to developing new products, processes, or technologies, making it a valuable resource for Tennessee-based businesses fostering innovation and progress in their respective fields.