Expect "turbulence" as Tennessee companies adjust to tax law changes
NASHVILLE, Tenn. (OSBORNE) -- Tennessee businesses are scrambling to get a handle on the new tax law.
Lipscomb University professor of business Andy Borchers says it’s a great time to be a tax consultant as companies puzzle out how to react to the Republican tax overhaul passed the week before Christmas.
Dr. Borchers says Tennessee industries that typically pay higher than average effective tax rates will likely benefit the most.
“Trucking companies and transportation companies like FedEx, historically have had very high marginal tax rates because they didn’t maybe have deductions that some other industries had. Retailers have also historically had high effective tax rates.”
Borchers says Tennessee manufacturers will likely go on a shopping spree by taking advantage of tax incentives for equipment purchases.
Republicans promised that workers would also benefit from the tax law changes, but Dr. Borchers says it’s going to be a while before we know if that’s actually going to happen.
“Some companies are going to buy back stock in an effort to reward their shareholders. Others may invest in new facilities and equipment. It’s really going to be a very mixed bag. Only in time will we see if that comes back to improvements for workers.”
Dr. Borchers says you can expect what he calls “turbulence” over the next few quarters as Tennessee companies adjust to the new tax structure.