Taxes - As introduced, allows a taxpayer to annually elect to take a bonus depreciation deduction of 40 percent of the cost of assets purchased on or after January 1, 2026, during the tax year in which the assets were purchased when calculating net earnings or net losses for excise tax purposes; allows the taxpayer to take the federal depreciation percentage if it exceeds 40 percent. - Amends TCA Title 67, Chapter 4, Part 20.

SB 32 modifies Tennessee's excise tax rules to allow businesses purchasing depreciable assets (like equipment or machinery) on or after January 1, 2026, to elect a 40% bonus depreciation deduction in the year of purchase. This applies specifically to calculating "net earnings" or "net loss" for excise tax purposes, directly affecting businesses that make such capital investments. If federal law increases bonus depreciation above 40%, Tennessee will automatically match that higher percentage for state excise tax calculations. The bill does not change income tax rules but aligns state excise tax treatment with federal depreciation allowances for qualifying assets.