Taxes, Excise - As enacted, authorizes, subject to certain provisions, a taxpayer, at the taxpayer's discretion, to add back to net earnings certain deductions and to subtract certain amounts. - Amends TCA Section 67-4-2006.

HB 635 amends Tennessee tax law to require the Department of Revenue to study how adjusting taxable income (via adding back certain deductions or subtracting specific amounts) affects the economy. This study, mandated by the bill, must be completed and reported to legislative committees by January 1, 2026. The bill itself does not change current tax calculations but sets a process for potential future adjustments to net earnings. It became effective May 2, 2025, after being signed by the Governor.