The 2026 legislative session of the Tennessee General Assembly concluded on April 25. Since the session began on January 13, TSCPA’s lobbying team reviewed proposed legislation and held our annual Day on the Hill. The General Assembly focused on the key priorities of education, public safety, healthcare, infrastructure, and the state budget. As required by the Constitution, the General Assembly passed a fiscal year budget before adjournment.
TSCPA closely monitored Senate Bill 32 and House Bill 477. The bill was sponsored by Senator Paul Bailey and Representative Kevin Vaughan. After President Trump signed the One Big Beautiful Bill Act (OBBBA) into law on July 4, 2025, Tennessee’s bonus depreciation rules became out of alignment with federal law. This bill would allow taxpayers to annually elect to take a bonus depreciation deduction of 40 percent of the cost of assets purchased on or after Jan. 1, 2026, during the tax year in which the assets were purchased when calculating net earnings or net losses for excise tax purposes. Additionally, this bill would allow taxpayers to take the federal depreciation percentage if it exceeds 40 percent. This was placed before the Finances, Ways, and Means subcommittee, but ultimately did not make it out of
committee.
In April, the Tennessee General Assembly passed the FY2027 state budget, totaling roughly $58.3 billion. This budget reflects a disciplined fiscal posture, with nine percent less funding than last year’s budget. Tennessee continues to maintain a strong fiscal position, but economic growth is estimated at only 2.35%. However, the revenue outlook remains stable. Fifty-two percent of the budget is funded by money in the general fund, 32% by federal sources, and the remainder by fees, tuition, and bonds. According to the Tennessee House Republican Caucus, Chairman of the House Finance Committee, Rep. Gary Hicks (R-Rogersville) noted, “This budget reflects our steadfast commitment to fiscal responsibility and demonstrates why Tennessee remains a strong national model of prudent governance. We can be proud that we have held the line on recurring expenditures, preserved Tennessee’s reputation as one of the lowest-taxed states in the nation and continued investing in our core priorities.”
TSCPA’s lobbying team is honored to advocate for the CPA profession and is committed to protecting the CPA license and engaging with lawmakers to create effective and efficient tax laws and processes.
