Tennessee

1. sounds good to me! Tennessee Information for Conducting Entrepreneurial Activities in the Volunteer State

2. Location • Borders 8 states: • Kentucky, North Carolina, Georgia, Alabama, • Mississippi, North Carolina, Missouri, Arkansas Source: Tennessee Maps

3. Tennessee Facts • Capital City: Nashville • Other Major Cities: Memphis, Chattanooga, Knoxville, Tri-Cities (Bristol, Kingsport, Johnson City) Area • Divided Into Three Regions: East, Middle, West • 95 Counties • State Population: 6,214,888 • Cities: • Nashville: 626,144 • Memphis: 906,825 • Knoxville: 430,019 • Tri-Cities: ≥272, 539 (The Tri-Cities can include Bristol, VA). • Source: Census Bureau

4. Tennessee Facts • Time Zones: EST and CST • Land Area: 41,220 mi.² Water Area: 926 mi.² • Mississippi River creates western border • Dimensions: 440 miles long, 120 miles wide • Major geographic feature: Appalachian Mountains, in East Tennessee Source: Tennessee Geography and Tennessee Facts, accessed 05/09/2009.

5. Business Quick Facts • Median Household Income, 2007: $43, 289 • Total Number of Firms, 2002: 454,366 • Manufacturers shipments, 2002: 109,293,454 • Wholesale trade sales, 2002: 97,792,030 • Retail sales, 2002: 60,136,403 • Building permits, 2007: 37,359 • Federal spending, 2007: 51,455,897 • Source: Census Bureau

6. Economic Data Source: Tennessee Economic Data

7. Tennessee ranked #16 in amount exported in the U.S. in 2005, with $19,069,850. Ranking includes the D.C., US Virgin Islands, Puerto Rico and “Unallocated” categories, making Tennessee #16 out of 54. Source: Exports

8. Economic Data Source: Tennessee Economic Data

9. Competitive Incentives • A Right-to-Work state • Worker’s Compensation Reform • Lowest utility costs in the nation • Consistently one of the lowest per capita taxed states in the nation • No state sales tax on manufacturing equipment for qualified businesses • No sales tax on pollution control equipment • No sales tax on raw material • No state property tax

10. Competitive Incentives(continued) • No property tax on work in progress or finished product inventories • Offers an investment tax credit of 1% • Offers a franchise tax jobs credit • Offers accelerated depreciation on personal property • Offers infrastructure and training grants up to $750,000 • Offers reduced sales tax on energy fuel and water for qualified manufacturers • Offers “Double Weighting” of Tennessee sales for Franchise and Excise taxes Your Bottom Line: A lowcost of doing business in Tennessee • Source: Tennessee Department of Economic & Community Development

11. Tax Incentives • Receive 1% excise tax credit for the purchase, installation and/or repair of qualified industrial machinery. • Net operating loss may carry forward 15 years. • All capital losses may be claimed the year incurred.

12. Franchise Tax Incentives • Tax credit of $2,000 (or $4,500 in special enhancement counties) per new full-time employee • in businesses that meet requirements of a minimum 25 new full-time jobs and additional capital investment of $500,000 and offer a minimal health care plan. • for new jobs in the future resulting in a net increase in jobs. • No franchise tax on: • property under construction, not being utilized by the business or pollution control equipment. • Property rented from an industrial development board may be capitalized on the business books. • Source: Tennessee Department of Economic & Community Development

13. Additional Tax Incentives • Personal Income Tax • Consistently one of the lowest per capita taxed states in the nation. • Property Tax • No property tax on: • goods-in-process. • finished goods inventories in hands of manufacturers. • inventories of merchandise for sale. • goods-in-transit (free port). • pollution control equipment required for compliance with federal, state or local environmental protection laws. • Source: Tennessee Department of Economic & Community Development

14. Additional Tax Incentives(continued) • Sales and Use Tax • No sales tax on: • purchases, installation and repairs of qualified industrial machinery. • raw materials for processing. • pollution control equipment of manufacturers. • reduced sales tax for manufacturers' use of energy fuel and water. Tax-exempt if used directly in the manufacturing process and separately metered. • any materials that become a component part of the finished product. • containers, labels and packaging materials if they are sold with or accompany the product at no additional charge. • Reduced sales tax rates for manufacturer's use of energy fuel and water. • Other Tax Credits • The Day Care Incentive • Credit against franchise and excise taxes for businesses that establish a day care center for employee's children. • Source: Tennessee Department of Economic & Community Development

15. Fortune 500s with HQs in Tennessee Source: Tennessee's Fortune 500 Companies

16. Tennessee Resources for Entrepreneurs • Financial Programs: • Locally Administered • Private Activity Bonds & Revolving Loan Funds • State Administered • Appalachian Regional Commission Program • Community Development Block Grants • Small Business Energy Loan Program • Small and Minority Owned Telecommunications Business Assistance Program

17. Tennessee Resources for Entrepreneurs(continued) • FastTrack Infrastructure Program • FastTrack Training Services Program • Construction of Industrial Highways • Tennessee Manufacturing Extension Partnership (TMEP): Assists manufacturing firms by providing engineers and scientists from NASA, the Oak Ridge National Laboratory and public and private universities and colleges to address problems and support industry through the application of technology. Source: Business Incentives

18. Summary • Tennessee offers plenty of natural resources, good infrastructure, and a close proximity to a professional and skilled labor workforce. • In addition, Tennessee offers many programs and incentives for starting a business, through both the government and its many universities.