Effective from January 1, 2023, Tennessee has adopted the provisions of IRC Section 168 as they were established by the 2017 tax reform legislation for assets purchased during that period. This means that bonus depreciation, previously not conforming with Tennessee tax laws, is now applicable. As a result, taxable income no longer requires a modification to account for the difference in depreciation expense with and without bonus.
However, for assets purchased on or before December 31, 2022, Tennessee will continue to follow the depreciation treatment that was in place before the enactment of H.B. 323. This treatment is based on Section 168 as it existed prior to March 9, 2002.