On May 8, Governor Bill Lee (R) signed SB 558, which provides for the exclusion of 95% of Global Intangible Low-Taxed Income (GILTI) and foreign earnings deemed repatriated under IRC section 965 (965 Income) from the tax base for tax years beginning on or after January 1, 2018. By enacting this bill, Tennessee joins about 20 other states that explicitly exclude at least 95% of GILTI from the tax base and joins about 25 other states that explicitly exclude at least 95% of 965 Income from the tax base. Despite this win for taxpayers, many may be wondering, “what about 965 Income included in 2017?” With respect to 2017, the Tennessee Department of Revenue issued guidance providing that 965 Income should not be included in the Tennessee tax base because such income was not reported on Line 28 of the Federal 1120 (the federal form changed for 2018 and 965 Income is included on Line 28 of the 2018 Form 1120). We understand that SB 558 has not impacted the...

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