Tenn. Code Ann. § 67-4-2111 — TN Code / Title 67 / Chapter 4 / Section 67-4-2111
Apportionment of net worth
Status: in_force

(a) (1) Except as otherwise provided in this part, for tax years beginning prior to July 1, 2016, the net worth of a taxpayer doing business both in and outside this state shall be apportioned to this state by multiplying such values by a fraction, the numerator of which shall be the property factor plus the payroll factor plus twice the receipts factor, and the denominator of the fraction shall be four (4). (2) Except as otherwise provided in this part, for tax years beginning on or after July 1, 2016, the net worth of a taxpayer doing business both in and outside this state shall be apportioned to this state by multiplying such values by a fraction, the numerator of which shall be the property factor plus the payroll factor plus three (3) times the receipts factor, and the denominator of the fraction shall be five (5). (3) Except as otherwise provided in this part, for tax years ending on or after December 31, 2023, but before December 31, 2024, the net worth of a taxpayer doing business both inside and outside this state must be apportioned to this state by multiplying such values by a fraction, the numerator of which is the property factor plus the payroll factor plus five (5) times the receipts factor, and the denominator of the fraction is seven (7). (4) Except as otherwise provided in this part, for tax years ending on or after December 31, 2024, but before December 31, 2025, the net worth of a taxpayer doing business both inside and outside this state must be apportioned to this state by multiplying such values by a fraction, the numerator of which is the property factor plus the payroll factor plus eleven (11) times the receipts factor, and the denominator of the fraction is thirteen (13). (5) Except as otherwise provided in this part, for tax years ending on or after December 31, 2025, the net worth of a taxpayer doing business both inside and outside this state must be apportioned to this state by multiplying such values by the receipts factor only. (6) If the application of subdivision (a)(3), (a)(4), or (a)(5) to a tax year results in a lower apportionment ratio than under the application of the apportionment method in subdivision (a)(2) as it applied to tax years ending before December 31, 2023, then a taxpayer may annually elect to apply the apportionment method in subdivision (a)(2) as it applied to tax years ending before December 31, 2023; provided, however, the election must result in a higher apportionment ratio for the tax year, and the taxpayer must have net earnings, rather than a net loss, for that tax year as computed under § 67-4-2006 . (7) Notwithstanding subdivisions (a)(3)-(a)(6), for tax years ending on or after December 31, 2023, the net worth for a "qualified member" of a "qualified group," as those terms are defined in subsection (j), must be apportioned to this state by multiplying such values by a fraction, the numerator of which is the property factor plus the payroll factor plus three (3) times the receipts factor, and the denominator of the fraction is five (5). (b) (1) The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period, and the denominator of which is the average value of all the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used during the tax period. (2) (A) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the property factor is a fraction computed as follows: (i) The numerator of which is the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period; and (ii) The denominator of which is the average value of the group's real and tangible personal property, excluding exempt inventory, owned or rented and used during the tax period. (B) Exempt inventory shall be determined on a per member basis. Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight (8) times the net annual rental rate. The property factor shall be determined based on a pro forma consolidated balance sheet prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated. (3) If a member of an affiliated group apportions its income in accordance with § 67-4-2013(a) , then for purposes of computing its net worth on a consolidated basis, the member shall compute the numerator of its property factor as follows: (A) The numerator shall include the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period; (B) In determining the average value of mobile property to be included in the numerator, the value of such property shall be multiplied by a fraction the numerator of which is the total in-state miles of similarly classified mobile property and the denominator of which is the total everywhere miles of similarly classified mobile property; and (C) For purpose of computing the fraction in subdivision (b)(3)(B), in-state miles and everywhere miles shall be calculated in accordance with the appropriate provisions of § 67-4-2013(a) . For purposes of determining whether mobile property is similarly classified, the classification groupings enumerated in § 67-4-2013(a)(1)-(7) shall be used. (4) For purposes of this section, "property" includes a taxpayer's ownership share of the real or tangible property owned or rented by any general partnership, or entity treated as a general partnership for federal income tax purposes, in which such taxpayer has an ownership interest. A return being filed by a limited liability company that has a general partnership as its single member shall include in its property factor only the real and tangible property owned or used by the limited liability company. "Property" also includes a taxpayer's ownership share of the real or tangible property owned or rented by any limited partnership, subchapter S corporation, limited liability company or other entity treated as a partnership for federal income tax purposes, in which the taxpayer has an ownership interest, directly or indirectly through one (1) or more such entities, and that is not doing business in Tennessee and, therefore, is not subject to Tennessee franchise tax. The cost value or rental value of such property shall be determined from the books and records of the entity in which the taxpayer has an interest and such property shall be valued in accordance with subsection (c). (c) (1) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight (8) times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer, less any annual rental rate received by the taxpayer from sub-rentals. A lessee's payments to a lessor, or on such lessor's behalf, as a part of rent, or in lieu of rent, shall be included as rent in the property factor of the apportionment formula provided by this section. Except with respect to tangible personal property, for purposes of this subsection (c), payments, such as interest, taxes, insurance, repairs or other items, shall be treated as rent paid by the lessee, if they would have been paid by the lessor if the lease contract or other agreement had not specifically provided that they be paid by the lessee. (2) For purposes of this section, the value of owned or leased mobile or movable property located both in and outside Tennessee during a tax period shall be determined on the basis of the total percentage of time such property is in the state during the tax period; provided, that the value of an automobile or truck assigned to a traveling employee shall be considered in Tennessee, if the employee's compensation is assigned to Tennessee for purposes of the taxpayer's apportionment formula payroll factor, or if such vehicle is licensed in Tennessee. (d) The average value of property shall be determined by averaging the values at the beginning and end of the tax period, but the commissioner may require the averaging of monthly values during the tax period, if reasonably required to reflect properly the average value of the taxpayer's property. (e) (1) The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax period. (2) (A) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the payroll factor is a fraction computed as follows: (i) The numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation; and (ii) The denominator of which is the total compensation of the group paid everywhere during the tax period. (B) The payroll factor shall be determined at the close of business on the last day of the tax year as shown by a pro forma consolidated income statement prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated. (3) If a member of an affiliated group apportions its income in accordance with § 67-4-2013(a) , then for purposes of computing its net worth on a consolidated basis, the member shall compute the numerator of its payroll factor as follows: (A) The numerator shall include the total amount paid in this state during the tax period by the taxpayer for compensation; (B) In determining the portion of compensation to be included in the numerator for personnel performing interstate services, the total compensation for such personnel shall be multiplied by a fraction the numerator of which is the total in-state miles traveled by personnel operating similarly classified mobile property and the denominator of which is the total everywhere miles traveled by personnel operating similarly classified mobile property; and (C) For purposes of computing the fraction in subdivision (e)(3)(B), in-state miles and everywhere miles shall be calculated in accordance with the appropriate provisions of § 67-4-2013(a) . For purposes of determining whether mobile property is similarly classified, the classification groupings enumerated in § 67-4-2013(a)(1)-(7) shall be used. (4) For purposes of this part, "compensation" has the same meaning as set forth in the Excise Tax Law of 1999, compiled in part 20 of this chapter. (5) For purposes of this section, "compensation" includes a taxpayer's ownership share of the compensation of any general partnership, or entity treated as a general partnership for federal income tax purposes, in which such taxpayer has an ownership interest. A return being filed by a limited liability company that has a general partnership as its single member shall include in its payroll factor only the compensation attributed to the limited liability company. "Compensation" also includes a taxpayer's ownership share of the real or tangible property owned or rented by any limited partnership, subchapter S corporation, limited liability company or other entity treated as a partnership for federal income tax purposes, in which the taxpayer has an ownership interest, directly or indirectly through one (1) or more such entities, and that is not doing business in Tennessee and thus is not subject to Tennessee franchise tax. (f) Compensation is paid in this state, if: (1) The individual's service is performed entirely in the state; (2) The individual's service is performed both in and outside the state, but the service performed outside the state is incidental to the individual's service in the state; or (3) Some of the service is performed in the state; and: (A) The base of operations, or, if there is no base of operations, the place from which the service is directed or controlled is in the state; or (B) The base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is in this state. (g) (1) The receipts factor is a fraction, the numerator of which is the total receipts of the taxpayer in this state during the tax period, and the denominator of which is the total receipts of the taxpayer everywhere during the tax period. (2) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the receipts factor is a fraction, the numerator of which is the taxpayer's total receipts in this state during the tax period, and the denominator of which is the group's total receipts during the tax period. The receipts factor shall be determined for the group at the close of business on the last day of the tax year as shown by a pro forma consolidated income statement prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated. (3) If a member of an affiliated group apportions its income in accordance with § 67-4-2013(a) , then for purposes of computing its net worth on a consolidated basis, the member shall compute the numerator of the receipts factor in accordance with the appropriate provisions of § 67-4-2013(a) . (4) For purposes of this section, "gross receipts" includes a taxpayer's ownership share of the gross receipts of any general partnership or entity treated as a general partnership for federal income tax purposes in which such taxpayer has an ownership interest. A return being filed by a limited liability company that has a general partnership as its single member shall include in its receipts factor only the gross receipts attributed to the limited liability company. "Gross receipts" also includes a taxpayer's ownership share of gross receipts of any limited partnership, subchapter S corporation, limited liability company, or other entity treated as a partnership for federal income tax purposes, in which the taxpayer has an ownership interest, directly or indirectly, through one (1) or more such entities, and that is not doing business in Tennessee and thus is not subject to Tennessee franchise tax. (h) Receipts from sales of tangible personal property are in this state, if the: (1) Property is delivered or shipped to a purchaser, other than the United States government, in this state regardless of the F.O.B. point or other conditions of the sale; or (2) Property is shipped from an office, store, warehouse, factory or other place of storage in this state and the purchaser is the United States government. (i) (1) Sales, other than sales of tangible personal property, are in this state if the taxpayer's market for the sales is in this state. The taxpayer's market for a sale is in this state: (A) In the case of sale, rental, lease, or license of real property, if and to the extent the property is located in this state; (B) In the case of rental, lease, or license of tangible personal property, if and to the extent the property is located in this state; (C) In the case of sale of a service, if and to the extent the service is delivered to a location in this state; and (D) In the case of intangible property: (i) That is rented, leased, or licensed, if and to the extent the intangible property is used in this state; provided, that intangible property utilized in marketing a good or service to a consumer is considered used in this state if that good or service is purchased by a consumer who is in this state; and (ii) That is sold, if and to the extent the property is used in this state; provided, that: (a) A contract right, government license, or similar intangible property that authorizes the holder to conduct a business activity in a specific geographic area is considered used in this state if the geographic area includes all or part of this state; (b) Receipts from intangible property sales that are contingent on the productivity, use, or disposition of the intangible property shall be treated as receipts from the rental, lease, or licensing of such intangible property under subdivision (i)(1)(D)(i); and (c) All other receipts from a sale of intangible property shall be excluded from the numerator and denominator of the receipts factor. (2) If the state or states of assignment under subdivision (i)(1) cannot be determined, the state or states of assignment shall be reasonably approximated. (3) If the state of assignment cannot be determined under subdivision (i)(1) or reasonably approximated under subdivision (i)(2), such sale shall be excluded from the numerator and denominator of the sales factor. (4) If the application of this subsection (i) to a tax year results in a lower apportionment factor than under the application of the apportionment method in this subsection (i) as it was in effect prior to January 1, 2016, then a taxpayer may annually elect to apply the apportionment method in this subsection (i) as in effect prior to January 1, 2016; provided, however, the election must result in a higher apportionment factor for the tax year, and the taxpayer must have net earnings, rather than a net loss, for that tax year as computed under § 67-4-2006 . (j) (1) For any qualified member of a qualified group, total receipts in this state shall equal the receipts from all sales of tangible personal property that are in this state as determined under subsection (h), plus the arithmetical average of the receipts from all sales other than sales of tangible personal property that are in this state as determined under each of the following alternative methods: (A) All sales that are in this state as determined under subsection (i); and (B) All sales, other than sales of tangible personal property, where the earnings-producing activity is performed: (i) In this state; or (ii) Both in and outside this state and a greater proportion of the earnings-producing activity is performed in this state than in any other state, based on costs of performance. (2) For purposes of this subsection (j), the following definitions shall apply: (A) "Qualified expenditures" means expenditures incurred in transactions with persons who are not members of the qualified group for the following: (i) Purchasing tangible personal property placed in service in this state by a member of the qualified group; and (ii) Payroll for employees employed by a member of the qualified group at a facility in this state; (B) "Qualified group" means an affiliated group that meets both of the following criteria: (i) One (1) or more members of the group is a qualified member; and (ii) The members of the group, during the tax period, either: (a) Incur, in the aggregate, qualified expenditures in an amount greater than one hundred fifty million dollars ($150,000,000); or (b) Make sales that are subject to the tax imposed by chapter 6 of this title in excess of one hundred fifty million dollars ($150,000,000); (C) "Qualified member" means a person that is principally engaged in the sale of "telecommunications service," "mobile telecommunications service," "internet access service," "video programming service," "direct-to-home satellite television programming service," or a combination of such services, as each such term is used or defined in chapter 6 of this title. (3) The method provided by this subsection (j) for determining the total receipts in this state of a qualified member shall be the only method for determining such receipts under this part. (k) Notwithstanding any provision of this section to the contrary, any gain on the sale of an asset that is designated as goodwill and is required to be included as Class VII assets pursuant to the reporting requirements of 26 U.S.C. §§ 338(b)(5) and 1060 , and associated regulations, shall be excluded from both the numerator and the denominator of the apportionment formula receipts factor. (l) (1) A taxpayer whose principal business in Tennessee is manufacturing may elect to apportion net worth to this state by multiplying such values by a fraction, the numerator of which is the total receipts of the taxpayer in Tennessee during the taxable year and the denominator of which is the total receipts of the taxpayer from any location within or outside of the state during the taxable year. (2) For purposes of this subsection ( l ), a taxpayer's principal business in Tennessee is manufacturing if more than fifty percent (50%) of the revenue derived from its activities in this state, excluding passive income, is from fabricating or processing tangible personal property for resale and consumption off the premises. For purposes of this subsection ( l ), "passive income" means dividend income, interest income, income derived from the sale of securities, and income derived from the licensing or sale of patents, trademarks, tradenames, copyrights, know-how, or other intellectual property. (3) To elect the method of apportionment provided in this subsection ( l ), the taxpayer shall notify the department of the election, in writing, on its return for the taxable year to which the election applies. (4) Once a taxpayer elects the method of apportionment provided in this subsection ( l ), such election shall remain in effect for a minimum of five (5) tax years and thereafter until revoked. The taxpayer may revoke the election after the minimum period by notifying the department of the revocation, in writing, on its return for the first taxable year to which the revocation applies. A taxpayer that revokes the election shall not be permitted to newly elect the method of apportionment provided in this subsection ( l ) for a period of five (5) tax years, beginning with the tax year in which the taxpayer revoked the previous election. (5) Notwithstanding any other provision of law, prior to July 1, 2033, or any earlier date on which no bonds issued pursuant to title 9, chapter 9, and outstanding as of July 1, 2013, shall remain outstanding, this subsection ( l ) shall become operative only for such fiscal years as to which the state funding board shall have certified as provided by § 9-9-104(b) . (6) This subsection ( l ) is repealed for tax years ending on or after December 31, 2025. (m) (1) Notwithstanding any other provision of this part, a financial asset management company may elect to apportion net worth by multiplying such net worth by a fraction, the numerator of which is the total receipts of the taxpayer in Tennessee during the taxable year as determined under this section and the denominator of which is the total receipts of the taxpayer everywhere during the taxable year. (2) For the purposes of this subsection (m): (A) (i) "Financial asset management company" means an entity that is a limited partnership, or is treated as a partnership for federal tax purposes, that is engaged in the business of providing financial asset management services, and either: (a) Has a class of equity securities registered under Section 12(g) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78l(g) ) and, as a result, is subject to the public company reporting requirements contained in Section 13(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78m ); or (b) Is owned by a publicly traded partnership that owns at least twenty five percent (25%) of the entity and such ownership interest constitutes more than fifty percent (50%) of the total assets of the publicly traded partnership; and (ii) "Financial asset management company" does not include any type of real estate investment trust as defined in § 67-4-2004 ; (B) "Financial asset management services" means the following services when performed with respect to financial investments: managing portfolio assets of others on a fee or commission basis; rendering investment advice, including investment research and analysis; making determinations as to when sales and purchases of investments are to be made; and selling or purchasing of investments; (C) "Financial investments" means, without limitation, investments in stocks, stock options, bonds, and alternative asset classes (including, but not limited to, real estate, commodities, and other debt obligations); and (D) "Publicly traded partnership" means an entity that is a limited partnership, or is treated as a partnership for federal tax purposes, that files with the securities and exchange commission and whose shares are regularly traded on a securities exchange that is either registered as a national securities exchange with the securities exchange commission under Section 6 of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78f ), or is a national securities exchange of a foreign country and regulated in a substantially similar manner by a foreign financial regulatory authority. (3) To elect the method of apportionment provided in this subsection (m), the taxpayer shall notify the department of the election, in writing, on its return for the taxable year to which the election applies. (4) Once a taxpayer elects the method of apportionment provided in this subsection (m), such election shall remain in effect for a minimum of five (5) tax years and thereafter until revoked. The taxpayer may revoke the election after the minimum period by notifying the department of the revocation, in writing, on its return for the first taxable year to which the revocation applies. A taxpayer that revokes the election shall not be permitted to newly elect the method of apportionment provided in this subsection (m) for a period of five (5) tax years, beginning with the tax year in which the taxpayer revoked the previous election. (5) This subsection (m) is repealed for tax years ending on or after December 31, 2025. (n) For purposes of this section: (1) "Exempt inventory" means that portion of a taxpayer's finished goods inventory in excess of fifty million dollars ($50,000,000) for fiscal years beginning on or after July 15, 1996; forty million dollars ($40,000,000) for fiscal years beginning on or after July 15, 1997; and thirty million dollars ($30,000,000) for fiscal years beginning on or after July 15, 1998; and (2) "Finished goods inventory" means tangible personal property that is: (A) Owned by the taxpayer; (B) Stored in a facility used primarily for manufacturing, warehousing, or distribution of such inventory; (C) Held for wholesale or retail sale by the taxpayer, but not sold over-the-counter to consumers at the location where stored; (D) Shown as inventory on the taxpayer's books and records kept in accordance with generally accepted accounting principles; and (E) In need of no further fabrication or processing by or for the taxpayer, except, in the case of configuring, testing, or packaging of computer products. Amended by 2024 Tenn. Acts, ch. 950,s 9, eff. 5/10/2024. Amended by 2024 Tenn. Acts, ch. 950,s 8, eff. 5/10/2024. Amended by 2024 Tenn. Acts, ch. 950,s 7, eff. 5/10/2024. Amended by 2023 Tenn. Acts, ch. 377, s 25, eff. 5/11/2023. Amended by 2023 Tenn. Acts, ch. 377, s 24, eff. 5/11/2023. Amended by 2023 Tenn. Acts, ch. 377, s 23, eff. 5/11/2023. Amended by 2018 Tenn. Acts, ch. 656, s 2, eff. 4/9/2018. Amended by 2017 Tenn. Acts, ch. 181, s 29, eff. 4/26/2017. Amended by 2015 Tenn. Acts, ch. 514, s 17, eff. 7/1/2016. Amended by 2015 Tenn. Acts, ch. 514, Secs.s 16, s 16 eff. 5/20/2015. Amended by 2013 Tenn. Acts, ch. 321, s 6, eff. 5/13/2013. Acts 1999, ch. 406, § 4; 2000, ch. 982, §§ 35 - 37, 52; 2004, ch. 932, §§ 7 - 9; 2006, ch. 1019, § 20; 2010 , ch. 1134, §§ 15-17; 2011 , ch. 467, §§ 3, 4.
(a) (1) Except as otherwise provided in this part, for tax years beginning prior to July 1, 2016, the net worth of a taxpayer doing business both in and outside this state shall be apportioned to this state by multiplying such values by a fraction, the numerator of which shall be the property factor plus the payroll factor plus twice the receipts factor, and the denominator of the fraction shall be four (4). (2) Except as otherwise provided in this part, for tax years beginning on or after July 1, 2016, the net worth of a taxpayer doing business both in and outside this state shall be apportioned to this state by multiplying such values by a fraction, the numerator of which shall be the property factor plus the payroll factor plus three (3) times the receipts factor, and the denominator of the fraction shall be five (5). (3) Except as otherwise provided in this part, for tax years ending on or after December 31, 2023, but before December 31, 2024, the net worth of a taxpayer doing business both inside and outside this state must be apportioned to this state by multiplying such values by a fraction, the numerator of which is the property factor plus the payroll factor plus five (5) times the receipts factor, and the denominator of the fraction is seven (7). (4) Except as otherwise provided in this part, for tax years ending on or after December 31, 2024, but before December 31, 2025, the net worth of a taxpayer doing business both inside and outside this state must be apportioned to this state by multiplying such values by a fraction, the numerator of which is the property factor plus the payroll factor plus eleven (11) times the receipts factor, and the denominator of the fraction is thirteen (13). (5) Except as otherwise provided in this part, for tax years ending on or after December 31, 2025, the net worth of a taxpayer doing business both inside and outside this state must be apportioned to this state by multiplying such values by the receipts factor only. (6) If the application of subdivision (a)(3), (a)(4), or (a)(5) to a tax year results in a lower apportionment ratio than under the application of the apportionment method in subdivision (a)(2) as it applied to tax years ending before December 31, 2023, then a taxpayer may annually elect to apply the apportionment method in subdivision (a)(2) as it applied to tax years ending before December 31, 2023; provided, however, the election must result in a higher apportionment ratio for the tax year, and the taxpayer must have net earnings, rather than a net loss, for that tax year as computed under § 67-4-2006 . (7) Notwithstanding subdivisions (a)(3)-(a)(6), for tax years ending on or after December 31, 2023, the net worth for a "qualified member" of a "qualified group," as those terms are defined in subsection (j), must be apportioned to this state by multiplying such values by a fraction, the numerator of which is the property factor plus the payroll factor plus three (3) times the receipts factor, and the denominator of the fraction is five (5).
(1) Except as otherwise provided in this part, for tax years beginning prior to July 1, 2016, the net worth of a taxpayer doing business both in and outside this state shall be apportioned to this state by multiplying such values by a fraction, the numerator of which shall be the property factor plus the payroll factor plus twice the receipts factor, and the denominator of the fraction shall be four (4).
(2) Except as otherwise provided in this part, for tax years beginning on or after July 1, 2016, the net worth of a taxpayer doing business both in and outside this state shall be apportioned to this state by multiplying such values by a fraction, the numerator of which shall be the property factor plus the payroll factor plus three (3) times the receipts factor, and the denominator of the fraction shall be five (5).
(3) Except as otherwise provided in this part, for tax years ending on or after December 31, 2023, but before December 31, 2024, the net worth of a taxpayer doing business both inside and outside this state must be apportioned to this state by multiplying such values by a fraction, the numerator of which is the property factor plus the payroll factor plus five (5) times the receipts factor, and the denominator of the fraction is seven (7).
(4) Except as otherwise provided in this part, for tax years ending on or after December 31, 2024, but before December 31, 2025, the net worth of a taxpayer doing business both inside and outside this state must be apportioned to this state by multiplying such values by a fraction, the numerator of which is the property factor plus the payroll factor plus eleven (11) times the receipts factor, and the denominator of the fraction is thirteen (13).
(5) Except as otherwise provided in this part, for tax years ending on or after December 31, 2025, the net worth of a taxpayer doing business both inside and outside this state must be apportioned to this state by multiplying such values by the receipts factor only.
(6) If the application of subdivision (a)(3), (a)(4), or (a)(5) to a tax year results in a lower apportionment ratio than under the application of the apportionment method in subdivision (a)(2) as it applied to tax years ending before December 31, 2023, then a taxpayer may annually elect to apply the apportionment method in subdivision (a)(2) as it applied to tax years ending before December 31, 2023; provided, however, the election must result in a higher apportionment ratio for the tax year, and the taxpayer must have net earnings, rather than a net loss, for that tax year as computed under § 67-4-2006 .
(7) Notwithstanding subdivisions (a)(3)-(a)(6), for tax years ending on or after December 31, 2023, the net worth for a "qualified member" of a "qualified group," as those terms are defined in subsection (j), must be apportioned to this state by multiplying such values by a fraction, the numerator of which is the property factor plus the payroll factor plus three (3) times the receipts factor, and the denominator of the fraction is five (5).
(b) (1) The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period, and the denominator of which is the average value of all the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used during the tax period. (2) (A) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the property factor is a fraction computed as follows: (i) The numerator of which is the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period; and (ii) The denominator of which is the average value of the group's real and tangible personal property, excluding exempt inventory, owned or rented and used during the tax period. (B) Exempt inventory shall be determined on a per member basis. Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight (8) times the net annual rental rate. The property factor shall be determined based on a pro forma consolidated balance sheet prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated. (3) If a member of an affiliated group apportions its income in accordance with § 67-4-2013(a) , then for purposes of computing its net worth on a consolidated basis, the member shall compute the numerator of its property factor as follows: (A) The numerator shall include the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period; (B) In determining the average value of mobile property to be included in the numerator, the value of such property shall be multiplied by a fraction the numerator of which is the total in-state miles of similarly classified mobile property and the denominator of which is the total everywhere miles of similarly classified mobile property; and (C) For purpose of computing the fraction in subdivision (b)(3)(B), in-state miles and everywhere miles shall be calculated in accordance with the appropriate provisions of § 67-4-2013(a) . For purposes of determining whether mobile property is similarly classified, the classification groupings enumerated in § 67-4-2013(a)(1)-(7) shall be used. (4) For purposes of this section, "property" includes a taxpayer's ownership share of the real or tangible property owned or rented by any general partnership, or entity treated as a general partnership for federal income tax purposes, in which such taxpayer has an ownership interest. A return being filed by a limited liability company that has a general partnership as its single member shall include in its property factor only the real and tangible property owned or used by the limited liability company. "Property" also includes a taxpayer's ownership share of the real or tangible property owned or rented by any limited partnership, subchapter S corporation, limited liability company or other entity treated as a partnership for federal income tax purposes, in which the taxpayer has an ownership interest, directly or indirectly through one (1) or more such entities, and that is not doing business in Tennessee and, therefore, is not subject to Tennessee franchise tax. The cost value or rental value of such property shall be determined from the books and records of the entity in which the taxpayer has an interest and such property shall be valued in accordance with subsection (c).
(1) The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period, and the denominator of which is the average value of all the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used during the tax period.
(2) (A) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the property factor is a fraction computed as follows: (i) The numerator of which is the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period; and (ii) The denominator of which is the average value of the group's real and tangible personal property, excluding exempt inventory, owned or rented and used during the tax period. (B) Exempt inventory shall be determined on a per member basis. Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight (8) times the net annual rental rate. The property factor shall be determined based on a pro forma consolidated balance sheet prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated.
(A) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the property factor is a fraction computed as follows: (i) The numerator of which is the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period; and (ii) The denominator of which is the average value of the group's real and tangible personal property, excluding exempt inventory, owned or rented and used during the tax period.
(i) The numerator of which is the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period; and
(ii) The denominator of which is the average value of the group's real and tangible personal property, excluding exempt inventory, owned or rented and used during the tax period.
(B) Exempt inventory shall be determined on a per member basis. Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight (8) times the net annual rental rate. The property factor shall be determined based on a pro forma consolidated balance sheet prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated.
(3) If a member of an affiliated group apportions its income in accordance with § 67-4-2013(a) , then for purposes of computing its net worth on a consolidated basis, the member shall compute the numerator of its property factor as follows: (A) The numerator shall include the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period; (B) In determining the average value of mobile property to be included in the numerator, the value of such property shall be multiplied by a fraction the numerator of which is the total in-state miles of similarly classified mobile property and the denominator of which is the total everywhere miles of similarly classified mobile property; and (C) For purpose of computing the fraction in subdivision (b)(3)(B), in-state miles and everywhere miles shall be calculated in accordance with the appropriate provisions of § 67-4-2013(a) . For purposes of determining whether mobile property is similarly classified, the classification groupings enumerated in § 67-4-2013(a)(1)-(7) shall be used.
(A) The numerator shall include the average value of the taxpayer's real and tangible personal property, excluding exempt inventory, owned or rented and used in this state during the tax period;
(B) In determining the average value of mobile property to be included in the numerator, the value of such property shall be multiplied by a fraction the numerator of which is the total in-state miles of similarly classified mobile property and the denominator of which is the total everywhere miles of similarly classified mobile property; and
(C) For purpose of computing the fraction in subdivision (b)(3)(B), in-state miles and everywhere miles shall be calculated in accordance with the appropriate provisions of § 67-4-2013(a) . For purposes of determining whether mobile property is similarly classified, the classification groupings enumerated in § 67-4-2013(a)(1)-(7) shall be used.
(4) For purposes of this section, "property" includes a taxpayer's ownership share of the real or tangible property owned or rented by any general partnership, or entity treated as a general partnership for federal income tax purposes, in which such taxpayer has an ownership interest. A return being filed by a limited liability company that has a general partnership as its single member shall include in its property factor only the real and tangible property owned or used by the limited liability company. "Property" also includes a taxpayer's ownership share of the real or tangible property owned or rented by any limited partnership, subchapter S corporation, limited liability company or other entity treated as a partnership for federal income tax purposes, in which the taxpayer has an ownership interest, directly or indirectly through one (1) or more such entities, and that is not doing business in Tennessee and, therefore, is not subject to Tennessee franchise tax. The cost value or rental value of such property shall be determined from the books and records of the entity in which the taxpayer has an interest and such property shall be valued in accordance with subsection (c).
(c) (1) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight (8) times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer, less any annual rental rate received by the taxpayer from sub-rentals. A lessee's payments to a lessor, or on such lessor's behalf, as a part of rent, or in lieu of rent, shall be included as rent in the property factor of the apportionment formula provided by this section. Except with respect to tangible personal property, for purposes of this subsection (c), payments, such as interest, taxes, insurance, repairs or other items, shall be treated as rent paid by the lessee, if they would have been paid by the lessor if the lease contract or other agreement had not specifically provided that they be paid by the lessee. (2) For purposes of this section, the value of owned or leased mobile or movable property located both in and outside Tennessee during a tax period shall be determined on the basis of the total percentage of time such property is in the state during the tax period; provided, that the value of an automobile or truck assigned to a traveling employee shall be considered in Tennessee, if the employee's compensation is assigned to Tennessee for purposes of the taxpayer's apportionment formula payroll factor, or if such vehicle is licensed in Tennessee.
(1) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight (8) times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer, less any annual rental rate received by the taxpayer from sub-rentals. A lessee's payments to a lessor, or on such lessor's behalf, as a part of rent, or in lieu of rent, shall be included as rent in the property factor of the apportionment formula provided by this section. Except with respect to tangible personal property, for purposes of this subsection (c), payments, such as interest, taxes, insurance, repairs or other items, shall be treated as rent paid by the lessee, if they would have been paid by the lessor if the lease contract or other agreement had not specifically provided that they be paid by the lessee.
(2) For purposes of this section, the value of owned or leased mobile or movable property located both in and outside Tennessee during a tax period shall be determined on the basis of the total percentage of time such property is in the state during the tax period; provided, that the value of an automobile or truck assigned to a traveling employee shall be considered in Tennessee, if the employee's compensation is assigned to Tennessee for purposes of the taxpayer's apportionment formula payroll factor, or if such vehicle is licensed in Tennessee.
(d) The average value of property shall be determined by averaging the values at the beginning and end of the tax period, but the commissioner may require the averaging of monthly values during the tax period, if reasonably required to reflect properly the average value of the taxpayer's property.
(e) (1) The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax period. (2) (A) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the payroll factor is a fraction computed as follows: (i) The numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation; and (ii) The denominator of which is the total compensation of the group paid everywhere during the tax period. (B) The payroll factor shall be determined at the close of business on the last day of the tax year as shown by a pro forma consolidated income statement prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated. (3) If a member of an affiliated group apportions its income in accordance with § 67-4-2013(a) , then for purposes of computing its net worth on a consolidated basis, the member shall compute the numerator of its payroll factor as follows: (A) The numerator shall include the total amount paid in this state during the tax period by the taxpayer for compensation; (B) In determining the portion of compensation to be included in the numerator for personnel performing interstate services, the total compensation for such personnel shall be multiplied by a fraction the numerator of which is the total in-state miles traveled by personnel operating similarly classified mobile property and the denominator of which is the total everywhere miles traveled by personnel operating similarly classified mobile property; and (C) For purposes of computing the fraction in subdivision (e)(3)(B), in-state miles and everywhere miles shall be calculated in accordance with the appropriate provisions of § 67-4-2013(a) . For purposes of determining whether mobile property is similarly classified, the classification groupings enumerated in § 67-4-2013(a)(1)-(7) shall be used. (4) For purposes of this part, "compensation" has the same meaning as set forth in the Excise Tax Law of 1999, compiled in part 20 of this chapter. (5) For purposes of this section, "compensation" includes a taxpayer's ownership share of the compensation of any general partnership, or entity treated as a general partnership for federal income tax purposes, in which such taxpayer has an ownership interest. A return being filed by a limited liability company that has a general partnership as its single member shall include in its payroll factor only the compensation attributed to the limited liability company. "Compensation" also includes a taxpayer's ownership share of the real or tangible property owned or rented by any limited partnership, subchapter S corporation, limited liability company or other entity treated as a partnership for federal income tax purposes, in which the taxpayer has an ownership interest, directly or indirectly through one (1) or more such entities, and that is not doing business in Tennessee and thus is not subject to Tennessee franchise tax.
(1) The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax period.
(2) (A) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the payroll factor is a fraction computed as follows: (i) The numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation; and (ii) The denominator of which is the total compensation of the group paid everywhere during the tax period. (B) The payroll factor shall be determined at the close of business on the last day of the tax year as shown by a pro forma consolidated income statement prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated.
(A) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the payroll factor is a fraction computed as follows: (i) The numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation; and (ii) The denominator of which is the total compensation of the group paid everywhere during the tax period.
(i) The numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation; and
(ii) The denominator of which is the total compensation of the group paid everywhere during the tax period.
(B) The payroll factor shall be determined at the close of business on the last day of the tax year as shown by a pro forma consolidated income statement prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated.
(3) If a member of an affiliated group apportions its income in accordance with § 67-4-2013(a) , then for purposes of computing its net worth on a consolidated basis, the member shall compute the numerator of its payroll factor as follows: (A) The numerator shall include the total amount paid in this state during the tax period by the taxpayer for compensation; (B) In determining the portion of compensation to be included in the numerator for personnel performing interstate services, the total compensation for such personnel shall be multiplied by a fraction the numerator of which is the total in-state miles traveled by personnel operating similarly classified mobile property and the denominator of which is the total everywhere miles traveled by personnel operating similarly classified mobile property; and (C) For purposes of computing the fraction in subdivision (e)(3)(B), in-state miles and everywhere miles shall be calculated in accordance with the appropriate provisions of § 67-4-2013(a) . For purposes of determining whether mobile property is similarly classified, the classification groupings enumerated in § 67-4-2013(a)(1)-(7) shall be used.
(A) The numerator shall include the total amount paid in this state during the tax period by the taxpayer for compensation;
(B) In determining the portion of compensation to be included in the numerator for personnel performing interstate services, the total compensation for such personnel shall be multiplied by a fraction the numerator of which is the total in-state miles traveled by personnel operating similarly classified mobile property and the denominator of which is the total everywhere miles traveled by personnel operating similarly classified mobile property; and
(C) For purposes of computing the fraction in subdivision (e)(3)(B), in-state miles and everywhere miles shall be calculated in accordance with the appropriate provisions of § 67-4-2013(a) . For purposes of determining whether mobile property is similarly classified, the classification groupings enumerated in § 67-4-2013(a)(1)-(7) shall be used.
(4) For purposes of this part, "compensation" has the same meaning as set forth in the Excise Tax Law of 1999, compiled in part 20 of this chapter.
(5) For purposes of this section, "compensation" includes a taxpayer's ownership share of the compensation of any general partnership, or entity treated as a general partnership for federal income tax purposes, in which such taxpayer has an ownership interest. A return being filed by a limited liability company that has a general partnership as its single member shall include in its payroll factor only the compensation attributed to the limited liability company. "Compensation" also includes a taxpayer's ownership share of the real or tangible property owned or rented by any limited partnership, subchapter S corporation, limited liability company or other entity treated as a partnership for federal income tax purposes, in which the taxpayer has an ownership interest, directly or indirectly through one (1) or more such entities, and that is not doing business in Tennessee and thus is not subject to Tennessee franchise tax.
(f) Compensation is paid in this state, if: (1) The individual's service is performed entirely in the state; (2) The individual's service is performed both in and outside the state, but the service performed outside the state is incidental to the individual's service in the state; or (3) Some of the service is performed in the state; and: (A) The base of operations, or, if there is no base of operations, the place from which the service is directed or controlled is in the state; or (B) The base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is in this state.
(1) The individual's service is performed entirely in the state;
(2) The individual's service is performed both in and outside the state, but the service performed outside the state is incidental to the individual's service in the state; or
(3) Some of the service is performed in the state; and: (A) The base of operations, or, if there is no base of operations, the place from which the service is directed or controlled is in the state; or (B) The base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is in this state.
(A) The base of operations, or, if there is no base of operations, the place from which the service is directed or controlled is in the state; or
(B) The base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is in this state.
(g) (1) The receipts factor is a fraction, the numerator of which is the total receipts of the taxpayer in this state during the tax period, and the denominator of which is the total receipts of the taxpayer everywhere during the tax period. (2) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the receipts factor is a fraction, the numerator of which is the taxpayer's total receipts in this state during the tax period, and the denominator of which is the group's total receipts during the tax period. The receipts factor shall be determined for the group at the close of business on the last day of the tax year as shown by a pro forma consolidated income statement prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated. (3) If a member of an affiliated group apportions its income in accordance with § 67-4-2013(a) , then for purposes of computing its net worth on a consolidated basis, the member shall compute the numerator of the receipts factor in accordance with the appropriate provisions of § 67-4-2013(a) . (4) For purposes of this section, "gross receipts" includes a taxpayer's ownership share of the gross receipts of any general partnership or entity treated as a general partnership for federal income tax purposes in which such taxpayer has an ownership interest. A return being filed by a limited liability company that has a general partnership as its single member shall include in its receipts factor only the gross receipts attributed to the limited liability company. "Gross receipts" also includes a taxpayer's ownership share of gross receipts of any limited partnership, subchapter S corporation, limited liability company, or other entity treated as a partnership for federal income tax purposes, in which the taxpayer has an ownership interest, directly or indirectly, through one (1) or more such entities, and that is not doing business in Tennessee and thus is not subject to Tennessee franchise tax.
(1) The receipts factor is a fraction, the numerator of which is the total receipts of the taxpayer in this state during the tax period, and the denominator of which is the total receipts of the taxpayer everywhere during the tax period.
(2) For a taxpayer electing to compute its net worth on a consolidated basis, and for a member of a captive REIT affiliated group, the receipts factor is a fraction, the numerator of which is the taxpayer's total receipts in this state during the tax period, and the denominator of which is the group's total receipts during the tax period. The receipts factor shall be determined for the group at the close of business on the last day of the tax year as shown by a pro forma consolidated income statement prepared in accordance with generally accepted accounting principles wherein transactions and holdings between members of the group and holdings in nondomestic persons have been eliminated.
(3) If a member of an affiliated group apportions its income in accordance with § 67-4-2013(a) , then for purposes of computing its net worth on a consolidated basis, the member shall compute the numerator of the receipts factor in accordance with the appropriate provisions of § 67-4-2013(a) .
(4) For purposes of this section, "gross receipts" includes a taxpayer's ownership share of the gross receipts of any general partnership or entity treated as a general partnership for federal income tax purposes in which such taxpayer has an ownership interest. A return being filed by a limited liability company that has a general partnership as its single member shall include in its receipts factor only the gross receipts attributed to the limited liability company. "Gross receipts" also includes a taxpayer's ownership share of gross receipts of any limited partnership, subchapter S corporation, limited liability company, or other entity treated as a partnership for federal income tax purposes, in which the taxpayer has an ownership interest, directly or indirectly, through one (1) or more such entities, and that is not doing business in Tennessee and thus is not subject to Tennessee franchise tax.
(h) Receipts from sales of tangible personal property are in this state, if the: (1) Property is delivered or shipped to a purchaser, other than the United States government, in this state regardless of the F.O.B. point or other conditions of the sale; or (2) Property is shipped from an office, store, warehouse, factory or other place of storage in this state and the purchaser is the United States government.
(1) Property is delivered or shipped to a purchaser, other than the United States government, in this state regardless of the F.O.B. point or other conditions of the sale; or
(2) Property is shipped from an office, store, warehouse, factory or other place of storage in this state and the purchaser is the United States government.
(i) (1) Sales, other than sales of tangible personal property, are in this state if the taxpayer's market for the sales is in this state. The taxpayer's market for a sale is in this state: (A) In the case of sale, rental, lease, or license of real property, if and to the extent the property is located in this state; (B) In the case of rental, lease, or license of tangible personal property, if and to the extent the property is located in this state; (C) In the case of sale of a service, if and to the extent the service is delivered to a location in this state; and (D) In the case of intangible property: (i) That is rented, leased, or licensed, if and to the extent the intangible property is used in this state; provided, that intangible property utilized in marketing a good or service to a consumer is considered used in this state if that good or service is purchased by a consumer who is in this state; and (ii) That is sold, if and to the extent the property is used in this state; provided, that: (a) A contract right, government license, or similar intangible property that authorizes the holder to conduct a business activity in a specific geographic area is considered used in this state if the geographic area includes all or part of this state; (b) Receipts from intangible property sales that are contingent on the productivity, use, or disposition of the intangible property shall be treated as receipts from the rental, lease, or licensing of such intangible property under subdivision (i)(1)(D)(i); and (c) All other receipts from a sale of intangible property shall be excluded from the numerator and denominator of the receipts factor. (2) If the state or states of assignment under subdivision (i)(1) cannot be determined, the state or states of assignment shall be reasonably approximated. (3) If the state of assignment cannot be determined under subdivision (i)(1) or reasonably approximated under subdivision (i)(2), such sale shall be excluded from the numerator and denominator of the sales factor. (4) If the application of this subsection (i) to a tax year results in a lower apportionment factor than under the application of the apportionment method in this subsection (i) as it was in effect prior to January 1, 2016, then a taxpayer may annually elect to apply the apportionment method in this subsection (i) as in effect prior to January 1, 2016; provided, however, the election must result in a higher apportionment factor for the tax year, and the taxpayer must have net earnings, rather than a net loss, for that tax year as computed under § 67-4-2006 .
(1) Sales, other than sales of tangible personal property, are in this state if the taxpayer's market for the sales is in this state. The taxpayer's market for a sale is in this state: (A) In the case of sale, rental, lease, or license of real property, if and to the extent the property is located in this state; (B) In the case of rental, lease, or license of tangible personal property, if and to the extent the property is located in this state; (C) In the case of sale of a service, if and to the extent the service is delivered to a location in this state; and (D) In the case of intangible property: (i) That is rented, leased, or licensed, if and to the extent the intangible property is used in this state; provided, that intangible property utilized in marketing a good or service to a consumer is considered used in this state if that good or service is purchased by a consumer who is in this state; and (ii) That is sold, if and to the extent the property is used in this state; provided, that: (a) A contract right, government license, or similar intangible property that authorizes the holder to conduct a business activity in a specific geographic area is considered used in this state if the geographic area includes all or part of this state; (b) Receipts from intangible property sales that are contingent on the productivity, use, or disposition of the intangible property shall be treated as receipts from the rental, lease, or licensing of such intangible property under subdivision (i)(1)(D)(i); and (c) All other receipts from a sale of intangible property shall be excluded from the numerator and denominator of the receipts factor.
(A) In the case of sale, rental, lease, or license of real property, if and to the extent the property is located in this state;
(B) In the case of rental, lease, or license of tangible personal property, if and to the extent the property is located in this state;
(C) In the case of sale of a service, if and to the extent the service is delivered to a location in this state; and
(D) In the case of intangible property: (i) That is rented, leased, or licensed, if and to the extent the intangible property is used in this state; provided, that intangible property utilized in marketing a good or service to a consumer is considered used in this state if that good or service is purchased by a consumer who is in this state; and (ii) That is sold, if and to the extent the property is used in this state; provided, that: (a) A contract right, government license, or similar intangible property that authorizes the holder to conduct a business activity in a specific geographic area is considered used in this state if the geographic area includes all or part of this state; (b) Receipts from intangible property sales that are contingent on the productivity, use, or disposition of the intangible property shall be treated as receipts from the rental, lease, or licensing of such intangible property under subdivision (i)(1)(D)(i); and (c) All other receipts from a sale of intangible property shall be excluded from the numerator and denominator of the receipts factor.
(i) That is rented, leased, or licensed, if and to the extent the intangible property is used in this state; provided, that intangible property utilized in marketing a good or service to a consumer is considered used in this state if that good or service is purchased by a consumer who is in this state; and
(ii) That is sold, if and to the extent the property is used in this state; provided, that: (a) A contract right, government license, or similar intangible property that authorizes the holder to conduct a business activity in a specific geographic area is considered used in this state if the geographic area includes all or part of this state; (b) Receipts from intangible property sales that are contingent on the productivity, use, or disposition of the intangible property shall be treated as receipts from the rental, lease, or licensing of such intangible property under subdivision (i)(1)(D)(i); and (c) All other receipts from a sale of intangible property shall be excluded from the numerator and denominator of the receipts factor.
(a) A contract right, government license, or similar intangible property that authorizes the holder to conduct a business activity in a specific geographic area is considered used in this state if the geographic area includes all or part of this state;
(b) Receipts from intangible property sales that are contingent on the productivity, use, or disposition of the intangible property shall be treated as receipts from the rental, lease, or licensing of such intangible property under subdivision (i)(1)(D)(i); and
(c) All other receipts from a sale of intangible property shall be excluded from the numerator and denominator of the receipts factor.
(2) If the state or states of assignment under subdivision (i)(1) cannot be determined, the state or states of assignment shall be reasonably approximated.
(3) If the state of assignment cannot be determined under subdivision (i)(1) or reasonably approximated under subdivision (i)(2), such sale shall be excluded from the numerator and denominator of the sales factor.
(4) If the application of this subsection (i) to a tax year results in a lower apportionment factor than under the application of the apportionment method in this subsection (i) as it was in effect prior to January 1, 2016, then a taxpayer may annually elect to apply the apportionment method in this subsection (i) as in effect prior to January 1, 2016; provided, however, the election must result in a higher apportionment factor for the tax year, and the taxpayer must have net earnings, rather than a net loss, for that tax year as computed under § 67-4-2006 .
(j) (1) For any qualified member of a qualified group, total receipts in this state shall equal the receipts from all sales of tangible personal property that are in this state as determined under subsection (h), plus the arithmetical average of the receipts from all sales other than sales of tangible personal property that are in this state as determined under each of the following alternative methods: (A) All sales that are in this state as determined under subsection (i); and (B) All sales, other than sales of tangible personal property, where the earnings-producing activity is performed: (i) In this state; or (ii) Both in and outside this state and a greater proportion of the earnings-producing activity is performed in this state than in any other state, based on costs of performance. (2) For purposes of this subsection (j), the following definitions shall apply: (A) "Qualified expenditures" means expenditures incurred in transactions with persons who are not members of the qualified group for the following: (i) Purchasing tangible personal property placed in service in this state by a member of the qualified group; and (ii) Payroll for employees employed by a member of the qualified group at a facility in this state; (B) "Qualified group" means an affiliated group that meets both of the following criteria: (i) One (1) or more members of the group is a qualified member; and (ii) The members of the group, during the tax period, either: (a) Incur, in the aggregate, qualified expenditures in an amount greater than one hundred fifty million dollars ($150,000,000); or (b) Make sales that are subject to the tax imposed by chapter 6 of this title in excess of one hundred fifty million dollars ($150,000,000); (C) "Qualified member" means a person that is principally engaged in the sale of "telecommunications service," "mobile telecommunications service," "internet access service," "video programming service," "direct-to-home satellite television programming service," or a combination of such services, as each such term is used or defined in chapter 6 of this title. (3) The method provided by this subsection (j) for determining the total receipts in this state of a qualified member shall be the only method for determining such receipts under this part.
(1) For any qualified member of a qualified group, total receipts in this state shall equal the receipts from all sales of tangible personal property that are in this state as determined under subsection (h), plus the arithmetical average of the receipts from all sales other than sales of tangible personal property that are in this state as determined under each of the following alternative methods: (A) All sales that are in this state as determined under subsection (i); and (B) All sales, other than sales of tangible personal property, where the earnings-producing activity is performed: (i) In this state; or (ii) Both in and outside this state and a greater proportion of the earnings-producing activity is performed in this state than in any other state, based on costs of performance.
(A) All sales that are in this state as determined under subsection (i); and
(B) All sales, other than sales of tangible personal property, where the earnings-producing activity is performed: (i) In this state; or (ii) Both in and outside this state and a greater proportion of the earnings-producing activity is performed in this state than in any other state, based on costs of performance.
(i) In this state; or
(ii) Both in and outside this state and a greater proportion of the earnings-producing activity is performed in this state than in any other state, based on costs of performance.
(2) For purposes of this subsection (j), the following definitions shall apply: (A) "Qualified expenditures" means expenditures incurred in transactions with persons who are not members of the qualified group for the following: (i) Purchasing tangible personal property placed in service in this state by a member of the qualified group; and (ii) Payroll for employees employed by a member of the qualified group at a facility in this state; (B) "Qualified group" means an affiliated group that meets both of the following criteria: (i) One (1) or more members of the group is a qualified member; and (ii) The members of the group, during the tax period, either: (a) Incur, in the aggregate, qualified expenditures in an amount greater than one hundred fifty million dollars ($150,000,000); or (b) Make sales that are subject to the tax imposed by chapter 6 of this title in excess of one hundred fifty million dollars ($150,000,000); (C) "Qualified member" means a person that is principally engaged in the sale of "telecommunications service," "mobile telecommunications service," "internet access service," "video programming service," "direct-to-home satellite television programming service," or a combination of such services, as each such term is used or defined in chapter 6 of this title.
(A) "Qualified expenditures" means expenditures incurred in transactions with persons who are not members of the qualified group for the following: (i) Purchasing tangible personal property placed in service in this state by a member of the qualified group; and (ii) Payroll for employees employed by a member of the qualified group at a facility in this state;
(i) Purchasing tangible personal property placed in service in this state by a member of the qualified group; and
(ii) Payroll for employees employed by a member of the qualified group at a facility in this state;
(B) "Qualified group" means an affiliated group that meets both of the following criteria: (i) One (1) or more members of the group is a qualified member; and (ii) The members of the group, during the tax period, either: (a) Incur, in the aggregate, qualified expenditures in an amount greater than one hundred fifty million dollars ($150,000,000); or (b) Make sales that are subject to the tax imposed by chapter 6 of this title in excess of one hundred fifty million dollars ($150,000,000);
(i) One (1) or more members of the group is a qualified member; and
(ii) The members of the group, during the tax period, either: (a) Incur, in the aggregate, qualified expenditures in an amount greater than one hundred fifty million dollars ($150,000,000); or (b) Make sales that are subject to the tax imposed by chapter 6 of this title in excess of one hundred fifty million dollars ($150,000,000);
(a) Incur, in the aggregate, qualified expenditures in an amount greater than one hundred fifty million dollars ($150,000,000); or
(b) Make sales that are subject to the tax imposed by chapter 6 of this title in excess of one hundred fifty million dollars ($150,000,000);
(C) "Qualified member" means a person that is principally engaged in the sale of "telecommunications service," "mobile telecommunications service," "internet access service," "video programming service," "direct-to-home satellite television programming service," or a combination of such services, as each such term is used or defined in chapter 6 of this title.
(3) The method provided by this subsection (j) for determining the total receipts in this state of a qualified member shall be the only method for determining such receipts under this part.
(k) Notwithstanding any provision of this section to the contrary, any gain on the sale of an asset that is designated as goodwill and is required to be included as Class VII assets pursuant to the reporting requirements of 26 U.S.C. §§ 338(b)(5) and 1060 , and associated regulations, shall be excluded from both the numerator and the denominator of the apportionment formula receipts factor.
(l) (1) A taxpayer whose principal business in Tennessee is manufacturing may elect to apportion net worth to this state by multiplying such values by a fraction, the numerator of which is the total receipts of the taxpayer in Tennessee during the taxable year and the denominator of which is the total receipts of the taxpayer from any location within or outside of the state during the taxable year. (2) For purposes of this subsection ( l ), a taxpayer's principal business in Tennessee is manufacturing if more than fifty percent (50%) of the revenue derived from its activities in this state, excluding passive income, is from fabricating or processing tangible personal property for resale and consumption off the premises. For purposes of this subsection ( l ), "passive income" means dividend income, interest income, income derived from the sale of securities, and income derived from the licensing or sale of patents, trademarks, tradenames, copyrights, know-how, or other intellectual property. (3) To elect the method of apportionment provided in this subsection ( l ), the taxpayer shall notify the department of the election, in writing, on its return for the taxable year to which the election applies. (4) Once a taxpayer elects the method of apportionment provided in this subsection ( l ), such election shall remain in effect for a minimum of five (5) tax years and thereafter until revoked. The taxpayer may revoke the election after the minimum period by notifying the department of the revocation, in writing, on its return for the first taxable year to which the revocation applies. A taxpayer that revokes the election shall not be permitted to newly elect the method of apportionment provided in this subsection ( l ) for a period of five (5) tax years, beginning with the tax year in which the taxpayer revoked the previous election. (5) Notwithstanding any other provision of law, prior to July 1, 2033, or any earlier date on which no bonds issued pursuant to title 9, chapter 9, and outstanding as of July 1, 2013, shall remain outstanding, this subsection ( l ) shall become operative only for such fiscal years as to which the state funding board shall have certified as provided by § 9-9-104(b) . (6) This subsection ( l ) is repealed for tax years ending on or after December 31, 2025.
(1) A taxpayer whose principal business in Tennessee is manufacturing may elect to apportion net worth to this state by multiplying such values by a fraction, the numerator of which is the total receipts of the taxpayer in Tennessee during the taxable year and the denominator of which is the total receipts of the taxpayer from any location within or outside of the state during the taxable year.
(2) For purposes of this subsection ( l ), a taxpayer's principal business in Tennessee is manufacturing if more than fifty percent (50%) of the revenue derived from its activities in this state, excluding passive income, is from fabricating or processing tangible personal property for resale and consumption off the premises. For purposes of this subsection ( l ), "passive income" means dividend income, interest income, income derived from the sale of securities, and income derived from the licensing or sale of patents, trademarks, tradenames, copyrights, know-how, or other intellectual property.
(3) To elect the method of apportionment provided in this subsection ( l ), the taxpayer shall notify the department of the election, in writing, on its return for the taxable year to which the election applies.
(4) Once a taxpayer elects the method of apportionment provided in this subsection ( l ), such election shall remain in effect for a minimum of five (5) tax years and thereafter until revoked. The taxpayer may revoke the election after the minimum period by notifying the department of the revocation, in writing, on its return for the first taxable year to which the revocation applies. A taxpayer that revokes the election shall not be permitted to newly elect the method of apportionment provided in this subsection ( l ) for a period of five (5) tax years, beginning with the tax year in which the taxpayer revoked the previous election.
(5) Notwithstanding any other provision of law, prior to July 1, 2033, or any earlier date on which no bonds issued pursuant to title 9, chapter 9, and outstanding as of July 1, 2013, shall remain outstanding, this subsection ( l ) shall become operative only for such fiscal years as to which the state funding board shall have certified as provided by § 9-9-104(b) .
(6) This subsection ( l ) is repealed for tax years ending on or after December 31, 2025.
(m) (1) Notwithstanding any other provision of this part, a financial asset management company may elect to apportion net worth by multiplying such net worth by a fraction, the numerator of which is the total receipts of the taxpayer in Tennessee during the taxable year as determined under this section and the denominator of which is the total receipts of the taxpayer everywhere during the taxable year. (2) For the purposes of this subsection (m): (A) (i) "Financial asset management company" means an entity that is a limited partnership, or is treated as a partnership for federal tax purposes, that is engaged in the business of providing financial asset management services, and either: (a) Has a class of equity securities registered under Section 12(g) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78l(g) ) and, as a result, is subject to the public company reporting requirements contained in Section 13(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78m ); or (b) Is owned by a publicly traded partnership that owns at least twenty five percent (25%) of the entity and such ownership interest constitutes more than fifty percent (50%) of the total assets of the publicly traded partnership; and (ii) "Financial asset management company" does not include any type of real estate investment trust as defined in § 67-4-2004 ; (B) "Financial asset management services" means the following services when performed with respect to financial investments: managing portfolio assets of others on a fee or commission basis; rendering investment advice, including investment research and analysis; making determinations as to when sales and purchases of investments are to be made; and selling or purchasing of investments; (C) "Financial investments" means, without limitation, investments in stocks, stock options, bonds, and alternative asset classes (including, but not limited to, real estate, commodities, and other debt obligations); and (D) "Publicly traded partnership" means an entity that is a limited partnership, or is treated as a partnership for federal tax purposes, that files with the securities and exchange commission and whose shares are regularly traded on a securities exchange that is either registered as a national securities exchange with the securities exchange commission under Section 6 of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78f ), or is a national securities exchange of a foreign country and regulated in a substantially similar manner by a foreign financial regulatory authority. (3) To elect the method of apportionment provided in this subsection (m), the taxpayer shall notify the department of the election, in writing, on its return for the taxable year to which the election applies. (4) Once a taxpayer elects the method of apportionment provided in this subsection (m), such election shall remain in effect for a minimum of five (5) tax years and thereafter until revoked. The taxpayer may revoke the election after the minimum period by notifying the department of the revocation, in writing, on its return for the first taxable year to which the revocation applies. A taxpayer that revokes the election shall not be permitted to newly elect the method of apportionment provided in this subsection (m) for a period of five (5) tax years, beginning with the tax year in which the taxpayer revoked the previous election. (5) This subsection (m) is repealed for tax years ending on or after December 31, 2025.
(1) Notwithstanding any other provision of this part, a financial asset management company may elect to apportion net worth by multiplying such net worth by a fraction, the numerator of which is the total receipts of the taxpayer in Tennessee during the taxable year as determined under this section and the denominator of which is the total receipts of the taxpayer everywhere during the taxable year.
(2) For the purposes of this subsection (m): (A) (i) "Financial asset management company" means an entity that is a limited partnership, or is treated as a partnership for federal tax purposes, that is engaged in the business of providing financial asset management services, and either: (a) Has a class of equity securities registered under Section 12(g) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78l(g) ) and, as a result, is subject to the public company reporting requirements contained in Section 13(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78m ); or (b) Is owned by a publicly traded partnership that owns at least twenty five percent (25%) of the entity and such ownership interest constitutes more than fifty percent (50%) of the total assets of the publicly traded partnership; and (ii) "Financial asset management company" does not include any type of real estate investment trust as defined in § 67-4-2004 ; (B) "Financial asset management services" means the following services when performed with respect to financial investments: managing portfolio assets of others on a fee or commission basis; rendering investment advice, including investment research and analysis; making determinations as to when sales and purchases of investments are to be made; and selling or purchasing of investments; (C) "Financial investments" means, without limitation, investments in stocks, stock options, bonds, and alternative asset classes (including, but not limited to, real estate, commodities, and other debt obligations); and (D) "Publicly traded partnership" means an entity that is a limited partnership, or is treated as a partnership for federal tax purposes, that files with the securities and exchange commission and whose shares are regularly traded on a securities exchange that is either registered as a national securities exchange with the securities exchange commission under Section 6 of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78f ), or is a national securities exchange of a foreign country and regulated in a substantially similar manner by a foreign financial regulatory authority.
(A) (i) "Financial asset management company" means an entity that is a limited partnership, or is treated as a partnership for federal tax purposes, that is engaged in the business of providing financial asset management services, and either: (a) Has a class of equity securities registered under Section 12(g) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78l(g) ) and, as a result, is subject to the public company reporting requirements contained in Section 13(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78m ); or (b) Is owned by a publicly traded partnership that owns at least twenty five percent (25%) of the entity and such ownership interest constitutes more than fifty percent (50%) of the total assets of the publicly traded partnership; and (ii) "Financial asset management company" does not include any type of real estate investment trust as defined in § 67-4-2004 ;
(i) "Financial asset management company" means an entity that is a limited partnership, or is treated as a partnership for federal tax purposes, that is engaged in the business of providing financial asset management services, and either: (a) Has a class of equity securities registered under Section 12(g) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78l(g) ) and, as a result, is subject to the public company reporting requirements contained in Section 13(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78m ); or (b) Is owned by a publicly traded partnership that owns at least twenty five percent (25%) of the entity and such ownership interest constitutes more than fifty percent (50%) of the total assets of the publicly traded partnership; and
(a) Has a class of equity securities registered under Section 12(g) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78l(g) ) and, as a result, is subject to the public company reporting requirements contained in Section 13(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78m ); or
(b) Is owned by a publicly traded partnership that owns at least twenty five percent (25%) of the entity and such ownership interest constitutes more than fifty percent (50%) of the total assets of the publicly traded partnership; and
(ii) "Financial asset management company" does not include any type of real estate investment trust as defined in § 67-4-2004 ;
(B) "Financial asset management services" means the following services when performed with respect to financial investments: managing portfolio assets of others on a fee or commission basis; rendering investment advice, including investment research and analysis; making determinations as to when sales and purchases of investments are to be made; and selling or purchasing of investments;
(C) "Financial investments" means, without limitation, investments in stocks, stock options, bonds, and alternative asset classes (including, but not limited to, real estate, commodities, and other debt obligations); and
(D) "Publicly traded partnership" means an entity that is a limited partnership, or is treated as a partnership for federal tax purposes, that files with the securities and exchange commission and whose shares are regularly traded on a securities exchange that is either registered as a national securities exchange with the securities exchange commission under Section 6 of the Securities Exchange Act of 1934 ( 15 U.S.C. § 78f ), or is a national securities exchange of a foreign country and regulated in a substantially similar manner by a foreign financial regulatory authority.
(3) To elect the method of apportionment provided in this subsection (m), the taxpayer shall notify the department of the election, in writing, on its return for the taxable year to which the election applies.
(4) Once a taxpayer elects the method of apportionment provided in this subsection (m), such election shall remain in effect for a minimum of five (5) tax years and thereafter until revoked. The taxpayer may revoke the election after the minimum period by notifying the department of the revocation, in writing, on its return for the first taxable year to which the revocation applies. A taxpayer that revokes the election shall not be permitted to newly elect the method of apportionment provided in this subsection (m) for a period of five (5) tax years, beginning with the tax year in which the taxpayer revoked the previous election.
(5) This subsection (m) is repealed for tax years ending on or after December 31, 2025.
(n) For purposes of this section: (1) "Exempt inventory" means that portion of a taxpayer's finished goods inventory in excess of fifty million dollars ($50,000,000) for fiscal years beginning on or after July 15, 1996; forty million dollars ($40,000,000) for fiscal years beginning on or after July 15, 1997; and thirty million dollars ($30,000,000) for fiscal years beginning on or after July 15, 1998; and (2) "Finished goods inventory" means tangible personal property that is: (A) Owned by the taxpayer; (B) Stored in a facility used primarily for manufacturing, warehousing, or distribution of such inventory; (C) Held for wholesale or retail sale by the taxpayer, but not sold over-the-counter to consumers at the location where stored; (D) Shown as inventory on the taxpayer's books and records kept in accordance with generally accepted accounting principles; and (E) In need of no further fabrication or processing by or for the taxpayer, except, in the case of configuring, testing, or packaging of computer products.
(1) "Exempt inventory" means that portion of a taxpayer's finished goods inventory in excess of fifty million dollars ($50,000,000) for fiscal years beginning on or after July 15, 1996; forty million dollars ($40,000,000) for fiscal years beginning on or after July 15, 1997; and thirty million dollars ($30,000,000) for fiscal years beginning on or after July 15, 1998; and
(2) "Finished goods inventory" means tangible personal property that is: (A) Owned by the taxpayer; (B) Stored in a facility used primarily for manufacturing, warehousing, or distribution of such inventory; (C) Held for wholesale or retail sale by the taxpayer, but not sold over-the-counter to consumers at the location where stored; (D) Shown as inventory on the taxpayer's books and records kept in accordance with generally accepted accounting principles; and (E) In need of no further fabrication or processing by or for the taxpayer, except, in the case of configuring, testing, or packaging of computer products.
(A) Owned by the taxpayer;
(B) Stored in a facility used primarily for manufacturing, warehousing, or distribution of such inventory;
(C) Held for wholesale or retail sale by the taxpayer, but not sold over-the-counter to consumers at the location where stored;
(D) Shown as inventory on the taxpayer's books and records kept in accordance with generally accepted accounting principles; and
(E) In need of no further fabrication or processing by or for the taxpayer, except, in the case of configuring, testing, or packaging of computer products.
Amended by 2024 Tenn. Acts, ch. 950,s 9, eff. 5/10/2024.
Amended by 2024 Tenn. Acts, ch. 950,s 8, eff. 5/10/2024.
Amended by 2024 Tenn. Acts, ch. 950,s 7, eff. 5/10/2024.
Amended by 2023 Tenn. Acts, ch. 377, s 25, eff. 5/11/2023.
Amended by 2023 Tenn. Acts, ch. 377, s 24, eff. 5/11/2023.
Amended by 2023 Tenn. Acts, ch. 377, s 23, eff. 5/11/2023.
Amended by 2018 Tenn. Acts, ch. 656, s 2, eff. 4/9/2018.
Amended by 2017 Tenn. Acts, ch. 181, s 29, eff. 4/26/2017.
Amended by 2015 Tenn. Acts, ch. 514, s 17, eff. 7/1/2016.
Amended by 2015 Tenn. Acts, ch. 514, Secs.s 16, s 16 eff. 5/20/2015.
Amended by 2013 Tenn. Acts, ch. 321, s 6, eff. 5/13/2013.
Acts 1999, ch. 406, § 4; 2000, ch. 982, §§ 35 - 37, 52; 2004, ch. 932, §§ 7 - 9; 2006, ch. 1019, § 20; 2010 , ch. 1134, §§ 15-17; 2011 , ch. 467, §§ 3, 4.
Tenn. Code Ann. § 67-3-901 — TN Code / Title 67 / Chapter 3 / Section 67-3-901
Gasoline tax - Distribution of receipts - Expenses of administration - Utility relocation loan program
Status: in_force

(a) The commissioner shall apportion for distribution all of the taxes collected pursuant to § 67-3-201 , and shall inform the department of finance and administration as to the proper amounts of all distributions to be made from the taxes. (b) Revenues from the tax imposed by § 67-3-201 shall be apportioned for distribution in the following order: (1) Amounts required to be paid to the debt service fund pursuant to title 9, chapter 9; (2) Of the amounts designated in subdivisions (b)(2)-(5) for distribution to the counties, cities and highway fund, one percent (1%) shall be subtracted from the amount designated for cities, one percent (1%) shall be subtracted from the amount designated for counties, and two percent (2%) shall be subtracted from the amount designated for the highway fund for distribution to the general fund for expenses of administration prior to the distribution of the funds to the cities, counties or highway fund; (3) Twenty-eight and sixty-eight hundredths percent (28.68%) of total taxes collected to the various counties of the state on the basis set out in § 54-4-103 ; (4) Fourteen and thirty-eight hundredths percent (14.38%) of total taxes collected to the various municipalities, as defined by § 54-4-201 , on the basis set out at § 54-4-203 ; and (5) Any funds remaining after the distributions set out in subdivisions (b)(1)-(4) to the highway fund. There shall be accumulated and set apart within the fund such amounts as required, not to exceed one million five hundred thousand dollars ($1,500,000) during each of four (4) succeeding fiscal years, which shall be available for carrying out the utility relocation loan program, established in subsection (j). (c) Revenues from the increases in taxes imposed by chapter 49 of the Acts of 1985, and chapter 454 of the Public Acts of 1985, effective 1985, shall be distributed in accordance with the following formula: (1) Two cents (2¢) of such revenues shall be apportioned pursuant to subsection (b); and (2) One cent (1¢) of such revenues shall be apportioned as follows: (A) Of such amount designated in subdivisions (c)(2)(B) and (C) for distribution to the counties and cities, one percent (1%) shall be subtracted from the amount designated for cities and one percent (1%) shall be subtracted from the amount designated for counties for distribution to the general fund for expenses of administration prior to the distribution of the funds to the cities or counties; (B) Sixty-six and two-thirds percent (662/3%) of such revenues collected to the various counties of the state on the basis set out in § 54-4-103 ; and (C) Thirty-three and one-third percent (331/3%) of such revenues collected to the various municipalities, as defined by § 54-4-201 , on the basis set out in § 54-4-203 . (d) Notwithstanding any law to the contrary, a county shall be eligible to receive those revenues to be distributed directly to it from the tax increases imposed by chapter 419 of the Public Acts of 1985, and chapter 454 of the Acts of 1985, effective 1985, only if it appropriates and allocates funds for road purposes from local revenue sources in an amount not less than the average of the five (5) preceding fiscal years, except bond issues and federal revenue sharing proceeds shall be excluded from the five (5) year average computation. If a county fails after July 1, 1985, to so appropriate and allocate at least such average amount for road purposes, then the amount of revenues that would otherwise be allocable to such county from the revenues derived by former §§ 67-3-603 and 67-3-604 as those statutes existed on July 1, 1985, shall be reduced by the amount of the decrease below such average. The amount of such funds not allocated to such county because of such decrease shall be allocated to the state highway fund, to be used by the department of transportation for the improvement of state highways in such county, and such state funds shall be in addition to the funds otherwise allocated for improvements in such county in that fiscal year. (e) Funds apportioned to counties under chapter 419 of the Public Acts of 1985 shall be used for resurfacing and upgrading county roads, including the paving of gravel roads. Any expenditure for equipment shall be approved by a two-thirds (2/3) vote of the county legislative body, prior to purchase. (f) Revenues from the increases in taxes imposed by former §§ 67-3-603 and 67-3-604 as those statutes existed on June 1, 1986, shall be distributed and allocated as follows: (1) Revenue from the first three cents (3¢) per gallon of such increases in taxes shall be apportioned as follows: (A) Amounts required to be paid to the debt service fund pursuant to title 9, chapter 9; (B) Three million dollars ($3,000,000) per annum, beginning on July 1, 1986, to the highway fund for the use and benefit of certain mass transit projects; and (C) All other amounts to the highway fund to be used for accelerating the resurfacing of the state system of highways in order to establish a twelve-year cycle of resurfacing with implementation beginning in 1986 and being completed by 1998, and for new construction in the primary system of highways over the period from 1986 to 1999; and (2) Revenue from one cent (1¢) of such increases in taxes shall be apportioned as follows: (A) Of such amount designated hereafter for distribution to counties and cities, one percent (1%) shall be subtracted from the amount designated for counties, and one percent (1%) shall be subtracted from the amount designated for cities for distribution to the general fund for expenses of administration prior to the distribution of the funds to the counties or cities; (B) Sixty-six and two-thirds percent (662/3%) of such revenues collected to the various counties of the state on the basis set out in § 54-4-103 ; and (C) Thirty-three and one-third percent (331/3%) of such revenues collected to the various municipalities, as defined by § 54-4-201 , on the basis set out in § 54-4-203 . (g) Prior to the apportionment set out in subsections (b), (c), (d) and (f), there shall be apportioned for distribution to the wildlife resources fund an amount equal to eighty-eight one-hundredths of one percent (0.88%) of the taxes collected under § 67-3-201 , exclusive of tax revenues resulting from the three cents (3¢) per gallon gasoline tax increase imposed by chapter 46 of the Public Acts of 1989 and all tax revenues resulting from the gasoline tax increase imposed by chapter 181 of the Public Acts of 2017. In addition to any other purposes authorized by law for which such funds may be used, the funds apportioned pursuant to this subsection (g) must also be used for public and environmental infrastructure at marinas. A grant awarded to a marina from the funds apportioned pursuant to this subsection (g) must be based on the amount of gasoline sold at that marina. The wildlife resources agency shall strive to ensure that the number of grant recipients is not less than twenty-five (25) marinas. (h) All revenues and investment income derived from the increase in the gasoline tax rate imposed by chapter 46 of the Public Acts of 1989, shall be placed in the state highway fund, and shall not be subject to the apportionment and distribution provisions of subsection (b). (i) Revenues from the one cent (1¢) increase in taxes, from nineteen cents (19¢) to twenty cents (20¢), imposed by former §§ 67-3-1703 and 67-3-1704, as those statutes existed under prior Tennessee law immediately after chapter 241 of the Acts 1989 became effective, shall be apportioned as provided in subdivision (f)(2). (j) (1) From the amounts accumulated and set apart pursuant to subdivision (b)(5), there is established a "utility relocation loan program" for loan financing of all costs incurred by any county, town, city, metropolitan government, utility district, authority or not-for-profit business organizations empowered to provide utility services that provide utility services to customers related to relocating, moving or re-installing their utility facilities, without any additions to their utility facilities, when located within rights-of-way of highways on the system of state highways and required because of highway construction projects administered by the department of transportation. (2) The Tennessee board of utility regulation shall review applications for utility relocation loans. Only applicants that meet all of the following criteria may be recommended to the state funding board for loans: (A) Are obligated to relocate, move or re-install its utilities due to a state highway project; (B) Have been otherwise unable to obtain financing for such relocation at a reasonable cost on reasonable terms; (C) Have established fees and charges for services of the utility to be effective immediately or over time sufficient to provide assurance of financial stability, and to agree to adjust such fees and charges periodically to ensure timely payment of loan payments and costs of operation of the system; and (D) Have covenanted to take such actions necessary to be able to pay all loan payments when due. (3) As part of its recommendation, the Tennessee board of utility regulation shall recommend an estimated amount of the loan and an interest rate for the loan, utilizing an economic index based upon factors that include, but are not limited to, per capita incomes and property values of the applicant. Applicants falling within the lower economic scale on the index shall be eligible for lower interest rates. Loans may be recommended at no interest for terms of five (5) years or less. In determining its recommendations, the board may use any index or regulations promulgated pursuant to § 68-221-1005(b) . (4) The state funding board is empowered to make and administer loans from the funds and may establish such terms as it determines to be appropriate to carry out the terms of this subsection (j), subject to the following: (A) Loans shall be for a term of fifteen (15) years or less, not to exceed the useful life of the relocated utilities, with no prepayment penalties; (B) Loans shall be subject to such other terms, not inconsistent with the foregoing, as the board determines to be appropriate; and (C) Prior to the start of each fiscal year, the secretary of the state funding board shall certify to the commissioner of finance and administration and the commissioner of transportation, the uncommitted balance in the loan program as of the start of the next fiscal year. (5) This subsection (j) shall not be construed to be an appropriation of funds and no funds shall be obligated or expended pursuant to this subsection (j), unless such funds are specifically appropriated through the department of transportation or as a specific amendment by the general appropriations act. (k) Notwithstanding § 54-2-103 or any other law to the contrary, a percentage of funds collected and allocated to the state highway fund shall be deposited in the general fund as follows: (1) If the statute allocating funds to the state highway fund earmarks two percent (2%) or more of the revenue collected for the general fund, no additional allocation to the general fund shall be made; (2) If the statute allocating funds to the state highway fund earmarks less than two percent (2%) of the revenue collected for the general fund, an amount equal to the amount necessary when added to the statutory earmark, if any, equals two percent (2%) of the revenue collected shall be earmarked for the general fund; (3) If the additional revenues earmarked for the general fund as provided in subdivision (k)(2) are less than seven million dollars ($7,000,000) in the fiscal year ending June 30, 2001, and in subsequent fiscal years, the earmark for the general fund from the gasoline tax imposed under § 67-3-201 shall be increased in an amount sufficient to provide that the total amount earmarked for the general fund as provided in subdivision (k)(2) and this subdivision (k)(3) shall be seven million dollars ($7,000,000) in the fiscal year ending June 30, 2001, and in subsequent fiscal years; (4) The allocation of funds as provided in this subsection (k) shall not have an impact on any scheduled or ongoing construction projects; (5) The department of transportation shall submit any proposal for apportionment of costs resulting from the general fund allocation in this subsection (k) to the state building commission for approval prior to implementing such proposal, including, but not limited to, the programs and projects to be affected and the amount proposed to be allocated to each such program or project; (6) Except as provided in subdivision (k)(4), it is the legislative intent that the effect of this subsection (k) be allocated on a pro rata basis to any affected program or project; and (7) This subsection (k) shall not apply to revenues generated under § 67-3-201 from the increase in the tax imposed by chapter 181 of the Public Acts of 2017. (l) Revenues derived under § 67-3-201 from the increase in taxes imposed by chapter 181 of the Public Acts of 2017 shall be apportioned and distributed in the following manner: (1) Twenty-five and four-tenths percent (25.4%) to the various counties of the state on the basis set forth in § 54-4-103 ; (2) Twelve and seven-tenths percent (12.7%) to the various municipalities, as defined by § 54-4-201 , on the basis set forth in § 54-4-203 ; and (3) Sixty-one and nine-tenths percent (61.9%) to the highway fund. (m) Notwithstanding any law to the contrary, a county shall be eligible to receive those revenues to be distributed directly to it from the increase in taxes imposed by chapter 181 of the Public Acts of 2017 only if it appropriates and allocates funds for road purposes from local revenue sources in an amount not less than the average of the five (5) preceding fiscal years, except bond issues and federal revenue sharing proceeds shall be excluded from the five-year average computation. If a county fails after July 1, 2017, to so appropriate and allocate at least such average amount for road purposes, then the amount of revenues that would otherwise be allocable to such county under this section shall be reduced by the amount of the decrease below such average. The amount of such funds not allocated to such county because of such decrease shall be allocated to the state highway fund, to be used by the department of transportation for the improvement of state highways in such county, and such state funds shall be in addition to the funds otherwise allocated for improvements in such county in that fiscal year. Amended by 2024 Tenn. Acts, ch. 660,s 1, eff. 7/1/2024. Amended by 2023 Tenn. Acts, ch. 463, s 30, eff. 7/1/2023. Amended by 2022 Tenn. Acts, ch. 1103, s 2, eff. 7/1/2022. Amended by 2022 Tenn. Acts, ch. 1103, s 1, eff. 7/1/2022. Amended by 2017 Tenn. Acts, ch. 478, s 2, eff. 7/1/2017. Amended by 2017 Tenn. Acts, ch. 181, s 20, eff. 7/1/2017. Amended by 2017 Tenn. Acts, ch. 181, s 19, eff. 7/1/2017. Acts 1997 , ch. 316, § 1; 1999, ch. 450, § 6; 2000, ch. 654, § 1; 2000, ch. 983, § 4; 2001, ch. 448, § 2; T.C.A., § 67-3-2001.
(a) The commissioner shall apportion for distribution all of the taxes collected pursuant to § 67-3-201 , and shall inform the department of finance and administration as to the proper amounts of all distributions to be made from the taxes.
(b) Revenues from the tax imposed by § 67-3-201 shall be apportioned for distribution in the following order: (1) Amounts required to be paid to the debt service fund pursuant to title 9, chapter 9; (2) Of the amounts designated in subdivisions (b)(2)-(5) for distribution to the counties, cities and highway fund, one percent (1%) shall be subtracted from the amount designated for cities, one percent (1%) shall be subtracted from the amount designated for counties, and two percent (2%) shall be subtracted from the amount designated for the highway fund for distribution to the general fund for expenses of administration prior to the distribution of the funds to the cities, counties or highway fund; (3) Twenty-eight and sixty-eight hundredths percent (28.68%) of total taxes collected to the various counties of the state on the basis set out in § 54-4-103 ; (4) Fourteen and thirty-eight hundredths percent (14.38%) of total taxes collected to the various municipalities, as defined by § 54-4-201 , on the basis set out at § 54-4-203 ; and (5) Any funds remaining after the distributions set out in subdivisions (b)(1)-(4) to the highway fund. There shall be accumulated and set apart within the fund such amounts as required, not to exceed one million five hundred thousand dollars ($1,500,000) during each of four (4) succeeding fiscal years, which shall be available for carrying out the utility relocation loan program, established in subsection (j).
(1) Amounts required to be paid to the debt service fund pursuant to title 9, chapter 9;
(2) Of the amounts designated in subdivisions (b)(2)-(5) for distribution to the counties, cities and highway fund, one percent (1%) shall be subtracted from the amount designated for cities, one percent (1%) shall be subtracted from the amount designated for counties, and two percent (2%) shall be subtracted from the amount designated for the highway fund for distribution to the general fund for expenses of administration prior to the distribution of the funds to the cities, counties or highway fund;
(3) Twenty-eight and sixty-eight hundredths percent (28.68%) of total taxes collected to the various counties of the state on the basis set out in § 54-4-103 ;
(4) Fourteen and thirty-eight hundredths percent (14.38%) of total taxes collected to the various municipalities, as defined by § 54-4-201 , on the basis set out at § 54-4-203 ; and
(5) Any funds remaining after the distributions set out in subdivisions (b)(1)-(4) to the highway fund. There shall be accumulated and set apart within the fund such amounts as required, not to exceed one million five hundred thousand dollars ($1,500,000) during each of four (4) succeeding fiscal years, which shall be available for carrying out the utility relocation loan program, established in subsection (j).
(c) Revenues from the increases in taxes imposed by chapter 49 of the Acts of 1985, and chapter 454 of the Public Acts of 1985, effective 1985, shall be distributed in accordance with the following formula: (1) Two cents (2¢) of such revenues shall be apportioned pursuant to subsection (b); and (2) One cent (1¢) of such revenues shall be apportioned as follows: (A) Of such amount designated in subdivisions (c)(2)(B) and (C) for distribution to the counties and cities, one percent (1%) shall be subtracted from the amount designated for cities and one percent (1%) shall be subtracted from the amount designated for counties for distribution to the general fund for expenses of administration prior to the distribution of the funds to the cities or counties; (B) Sixty-six and two-thirds percent (662/3%) of such revenues collected to the various counties of the state on the basis set out in § 54-4-103 ; and (C) Thirty-three and one-third percent (331/3%) of such revenues collected to the various municipalities, as defined by § 54-4-201 , on the basis set out in § 54-4-203 .
(1) Two cents (2¢) of such revenues shall be apportioned pursuant to subsection (b); and
(2) One cent (1¢) of such revenues shall be apportioned as follows: (A) Of such amount designated in subdivisions (c)(2)(B) and (C) for distribution to the counties and cities, one percent (1%) shall be subtracted from the amount designated for cities and one percent (1%) shall be subtracted from the amount designated for counties for distribution to the general fund for expenses of administration prior to the distribution of the funds to the cities or counties; (B) Sixty-six and two-thirds percent (662/3%) of such revenues collected to the various counties of the state on the basis set out in § 54-4-103 ; and (C) Thirty-three and one-third percent (331/3%) of such revenues collected to the various municipalities, as defined by § 54-4-201 , on the basis set out in § 54-4-203 .
(A) Of such amount designated in subdivisions (c)(2)(B) and (C) for distribution to the counties and cities, one percent (1%) shall be subtracted from the amount designated for cities and one percent (1%) shall be subtracted from the amount designated for counties for distribution to the general fund for expenses of administration prior to the distribution of the funds to the cities or counties;
(B) Sixty-six and two-thirds percent (662/3%) of such revenues collected to the various counties of the state on the basis set out in § 54-4-103 ; and
(C) Thirty-three and one-third percent (331/3%) of such revenues collected to the various municipalities, as defined by § 54-4-201 , on the basis set out in § 54-4-203 .
(d) Notwithstanding any law to the contrary, a county shall be eligible to receive those revenues to be distributed directly to it from the tax increases imposed by chapter 419 of the Public Acts of 1985, and chapter 454 of the Acts of 1985, effective 1985, only if it appropriates and allocates funds for road purposes from local revenue sources in an amount not less than the average of the five (5) preceding fiscal years, except bond issues and federal revenue sharing proceeds shall be excluded from the five (5) year average computation. If a county fails after July 1, 1985, to so appropriate and allocate at least such average amount for road purposes, then the amount of revenues that would otherwise be allocable to such county from the revenues derived by former §§ 67-3-603 and 67-3-604 as those statutes existed on July 1, 1985, shall be reduced by the amount of the decrease below such average. The amount of such funds not allocated to such county because of such decrease shall be allocated to the state highway fund, to be used by the department of transportation for the improvement of state highways in such county, and such state funds shall be in addition to the funds otherwise allocated for improvements in such county in that fiscal year.
(e) Funds apportioned to counties under chapter 419 of the Public Acts of 1985 shall be used for resurfacing and upgrading county roads, including the paving of gravel roads. Any expenditure for equipment shall be approved by a two-thirds (2/3) vote of the county legislative body, prior to purchase.
(f) Revenues from the increases in taxes imposed by former §§ 67-3-603 and 67-3-604 as those statutes existed on June 1, 1986, shall be distributed and allocated as follows: (1) Revenue from the first three cents (3¢) per gallon of such increases in taxes shall be apportioned as follows: (A) Amounts required to be paid to the debt service fund pursuant to title 9, chapter 9; (B) Three million dollars ($3,000,000) per annum, beginning on July 1, 1986, to the highway fund for the use and benefit of certain mass transit projects; and (C) All other amounts to the highway fund to be used for accelerating the resurfacing of the state system of highways in order to establish a twelve-year cycle of resurfacing with implementation beginning in 1986 and being completed by 1998, and for new construction in the primary system of highways over the period from 1986 to 1999; and (2) Revenue from one cent (1¢) of such increases in taxes shall be apportioned as follows: (A) Of such amount designated hereafter for distribution to counties and cities, one percent (1%) shall be subtracted from the amount designated for counties, and one percent (1%) shall be subtracted from the amount designated for cities for distribution to the general fund for expenses of administration prior to the distribution of the funds to the counties or cities; (B) Sixty-six and two-thirds percent (662/3%) of such revenues collected to the various counties of the state on the basis set out in § 54-4-103 ; and (C) Thirty-three and one-third percent (331/3%) of such revenues collected to the various municipalities, as defined by § 54-4-201 , on the basis set out in § 54-4-203 .
(1) Revenue from the first three cents (3¢) per gallon of such increases in taxes shall be apportioned as follows: (A) Amounts required to be paid to the debt service fund pursuant to title 9, chapter 9; (B) Three million dollars ($3,000,000) per annum, beginning on July 1, 1986, to the highway fund for the use and benefit of certain mass transit projects; and (C) All other amounts to the highway fund to be used for accelerating the resurfacing of the state system of highways in order to establish a twelve-year cycle of resurfacing with implementation beginning in 1986 and being completed by 1998, and for new construction in the primary system of highways over the period from 1986 to 1999; and
(A) Amounts required to be paid to the debt service fund pursuant to title 9, chapter 9;
(B) Three million dollars ($3,000,000) per annum, beginning on July 1, 1986, to the highway fund for the use and benefit of certain mass transit projects; and
(C) All other amounts to the highway fund to be used for accelerating the resurfacing of the state system of highways in order to establish a twelve-year cycle of resurfacing with implementation beginning in 1986 and being completed by 1998, and for new construction in the primary system of highways over the period from 1986 to 1999; and
(2) Revenue from one cent (1¢) of such increases in taxes shall be apportioned as follows: (A) Of such amount designated hereafter for distribution to counties and cities, one percent (1%) shall be subtracted from the amount designated for counties, and one percent (1%) shall be subtracted from the amount designated for cities for distribution to the general fund for expenses of administration prior to the distribution of the funds to the counties or cities; (B) Sixty-six and two-thirds percent (662/3%) of such revenues collected to the various counties of the state on the basis set out in § 54-4-103 ; and (C) Thirty-three and one-third percent (331/3%) of such revenues collected to the various municipalities, as defined by § 54-4-201 , on the basis set out in § 54-4-203 .
(A) Of such amount designated hereafter for distribution to counties and cities, one percent (1%) shall be subtracted from the amount designated for counties, and one percent (1%) shall be subtracted from the amount designated for cities for distribution to the general fund for expenses of administration prior to the distribution of the funds to the counties or cities;
(B) Sixty-six and two-thirds percent (662/3%) of such revenues collected to the various counties of the state on the basis set out in § 54-4-103 ; and
(C) Thirty-three and one-third percent (331/3%) of such revenues collected to the various municipalities, as defined by § 54-4-201 , on the basis set out in § 54-4-203 .
(g) Prior to the apportionment set out in subsections (b), (c), (d) and (f), there shall be apportioned for distribution to the wildlife resources fund an amount equal to eighty-eight one-hundredths of one percent (0.88%) of the taxes collected under § 67-3-201 , exclusive of tax revenues resulting from the three cents (3¢) per gallon gasoline tax increase imposed by chapter 46 of the Public Acts of 1989 and all tax revenues resulting from the gasoline tax increase imposed by chapter 181 of the Public Acts of 2017. In addition to any other purposes authorized by law for which such funds may be used, the funds apportioned pursuant to this subsection (g) must also be used for public and environmental infrastructure at marinas. A grant awarded to a marina from the funds apportioned pursuant to this subsection (g) must be based on the amount of gasoline sold at that marina. The wildlife resources agency shall strive to ensure that the number of grant recipients is not less than twenty-five (25) marinas.
(h) All revenues and investment income derived from the increase in the gasoline tax rate imposed by chapter 46 of the Public Acts of 1989, shall be placed in the state highway fund, and shall not be subject to the apportionment and distribution provisions of subsection (b).
(i) Revenues from the one cent (1¢) increase in taxes, from nineteen cents (19¢) to twenty cents (20¢), imposed by former §§ 67-3-1703 and 67-3-1704, as those statutes existed under prior Tennessee law immediately after chapter 241 of the Acts 1989 became effective, shall be apportioned as provided in subdivision (f)(2).
(j) (1) From the amounts accumulated and set apart pursuant to subdivision (b)(5), there is established a "utility relocation loan program" for loan financing of all costs incurred by any county, town, city, metropolitan government, utility district, authority or not-for-profit business organizations empowered to provide utility services that provide utility services to customers related to relocating, moving or re-installing their utility facilities, without any additions to their utility facilities, when located within rights-of-way of highways on the system of state highways and required because of highway construction projects administered by the department of transportation. (2) The Tennessee board of utility regulation shall review applications for utility relocation loans. Only applicants that meet all of the following criteria may be recommended to the state funding board for loans: (A) Are obligated to relocate, move or re-install its utilities due to a state highway project; (B) Have been otherwise unable to obtain financing for such relocation at a reasonable cost on reasonable terms; (C) Have established fees and charges for services of the utility to be effective immediately or over time sufficient to provide assurance of financial stability, and to agree to adjust such fees and charges periodically to ensure timely payment of loan payments and costs of operation of the system; and (D) Have covenanted to take such actions necessary to be able to pay all loan payments when due. (3) As part of its recommendation, the Tennessee board of utility regulation shall recommend an estimated amount of the loan and an interest rate for the loan, utilizing an economic index based upon factors that include, but are not limited to, per capita incomes and property values of the applicant. Applicants falling within the lower economic scale on the index shall be eligible for lower interest rates. Loans may be recommended at no interest for terms of five (5) years or less. In determining its recommendations, the board may use any index or regulations promulgated pursuant to § 68-221-1005(b) . (4) The state funding board is empowered to make and administer loans from the funds and may establish such terms as it determines to be appropriate to carry out the terms of this subsection (j), subject to the following: (A) Loans shall be for a term of fifteen (15) years or less, not to exceed the useful life of the relocated utilities, with no prepayment penalties; (B) Loans shall be subject to such other terms, not inconsistent with the foregoing, as the board determines to be appropriate; and (C) Prior to the start of each fiscal year, the secretary of the state funding board shall certify to the commissioner of finance and administration and the commissioner of transportation, the uncommitted balance in the loan program as of the start of the next fiscal year. (5) This subsection (j) shall not be construed to be an appropriation of funds and no funds shall be obligated or expended pursuant to this subsection (j), unless such funds are specifically appropriated through the department of transportation or as a specific amendment by the general appropriations act.
(1) From the amounts accumulated and set apart pursuant to subdivision (b)(5), there is established a "utility relocation loan program" for loan financing of all costs incurred by any county, town, city, metropolitan government, utility district, authority or not-for-profit business organizations empowered to provide utility services that provide utility services to customers related to relocating, moving or re-installing their utility facilities, without any additions to their utility facilities, when located within rights-of-way of highways on the system of state highways and required because of highway construction projects administered by the department of transportation.
(2) The Tennessee board of utility regulation shall review applications for utility relocation loans. Only applicants that meet all of the following criteria may be recommended to the state funding board for loans: (A) Are obligated to relocate, move or re-install its utilities due to a state highway project; (B) Have been otherwise unable to obtain financing for such relocation at a reasonable cost on reasonable terms; (C) Have established fees and charges for services of the utility to be effective immediately or over time sufficient to provide assurance of financial stability, and to agree to adjust such fees and charges periodically to ensure timely payment of loan payments and costs of operation of the system; and (D) Have covenanted to take such actions necessary to be able to pay all loan payments when due.
(A) Are obligated to relocate, move or re-install its utilities due to a state highway project;
(B) Have been otherwise unable to obtain financing for such relocation at a reasonable cost on reasonable terms;
(C) Have established fees and charges for services of the utility to be effective immediately or over time sufficient to provide assurance of financial stability, and to agree to adjust such fees and charges periodically to ensure timely payment of loan payments and costs of operation of the system; and
(D) Have covenanted to take such actions necessary to be able to pay all loan payments when due.
(3) As part of its recommendation, the Tennessee board of utility regulation shall recommend an estimated amount of the loan and an interest rate for the loan, utilizing an economic index based upon factors that include, but are not limited to, per capita incomes and property values of the applicant. Applicants falling within the lower economic scale on the index shall be eligible for lower interest rates. Loans may be recommended at no interest for terms of five (5) years or less. In determining its recommendations, the board may use any index or regulations promulgated pursuant to § 68-221-1005(b) .
(4) The state funding board is empowered to make and administer loans from the funds and may establish such terms as it determines to be appropriate to carry out the terms of this subsection (j), subject to the following: (A) Loans shall be for a term of fifteen (15) years or less, not to exceed the useful life of the relocated utilities, with no prepayment penalties; (B) Loans shall be subject to such other terms, not inconsistent with the foregoing, as the board determines to be appropriate; and (C) Prior to the start of each fiscal year, the secretary of the state funding board shall certify to the commissioner of finance and administration and the commissioner of transportation, the uncommitted balance in the loan program as of the start of the next fiscal year.
(A) Loans shall be for a term of fifteen (15) years or less, not to exceed the useful life of the relocated utilities, with no prepayment penalties;
(B) Loans shall be subject to such other terms, not inconsistent with the foregoing, as the board determines to be appropriate; and
(C) Prior to the start of each fiscal year, the secretary of the state funding board shall certify to the commissioner of finance and administration and the commissioner of transportation, the uncommitted balance in the loan program as of the start of the next fiscal year.
(5) This subsection (j) shall not be construed to be an appropriation of funds and no funds shall be obligated or expended pursuant to this subsection (j), unless such funds are specifically appropriated through the department of transportation or as a specific amendment by the general appropriations act.
(k) Notwithstanding § 54-2-103 or any other law to the contrary, a percentage of funds collected and allocated to the state highway fund shall be deposited in the general fund as follows: (1) If the statute allocating funds to the state highway fund earmarks two percent (2%) or more of the revenue collected for the general fund, no additional allocation to the general fund shall be made; (2) If the statute allocating funds to the state highway fund earmarks less than two percent (2%) of the revenue collected for the general fund, an amount equal to the amount necessary when added to the statutory earmark, if any, equals two percent (2%) of the revenue collected shall be earmarked for the general fund; (3) If the additional revenues earmarked for the general fund as provided in subdivision (k)(2) are less than seven million dollars ($7,000,000) in the fiscal year ending June 30, 2001, and in subsequent fiscal years, the earmark for the general fund from the gasoline tax imposed under § 67-3-201 shall be increased in an amount sufficient to provide that the total amount earmarked for the general fund as provided in subdivision (k)(2) and this subdivision (k)(3) shall be seven million dollars ($7,000,000) in the fiscal year ending June 30, 2001, and in subsequent fiscal years; (4) The allocation of funds as provided in this subsection (k) shall not have an impact on any scheduled or ongoing construction projects; (5) The department of transportation shall submit any proposal for apportionment of costs resulting from the general fund allocation in this subsection (k) to the state building commission for approval prior to implementing such proposal, including, but not limited to, the programs and projects to be affected and the amount proposed to be allocated to each such program or project; (6) Except as provided in subdivision (k)(4), it is the legislative intent that the effect of this subsection (k) be allocated on a pro rata basis to any affected program or project; and (7) This subsection (k) shall not apply to revenues generated under § 67-3-201 from the increase in the tax imposed by chapter 181 of the Public Acts of 2017.
(1) If the statute allocating funds to the state highway fund earmarks two percent (2%) or more of the revenue collected for the general fund, no additional allocation to the general fund shall be made;
(2) If the statute allocating funds to the state highway fund earmarks less than two percent (2%) of the revenue collected for the general fund, an amount equal to the amount necessary when added to the statutory earmark, if any, equals two percent (2%) of the revenue collected shall be earmarked for the general fund;
(3) If the additional revenues earmarked for the general fund as provided in subdivision (k)(2) are less than seven million dollars ($7,000,000) in the fiscal year ending June 30, 2001, and in subsequent fiscal years, the earmark for the general fund from the gasoline tax imposed under § 67-3-201 shall be increased in an amount sufficient to provide that the total amount earmarked for the general fund as provided in subdivision (k)(2) and this subdivision (k)(3) shall be seven million dollars ($7,000,000) in the fiscal year ending June 30, 2001, and in subsequent fiscal years;
(4) The allocation of funds as provided in this subsection (k) shall not have an impact on any scheduled or ongoing construction projects;
(5) The department of transportation shall submit any proposal for apportionment of costs resulting from the general fund allocation in this subsection (k) to the state building commission for approval prior to implementing such proposal, including, but not limited to, the programs and projects to be affected and the amount proposed to be allocated to each such program or project;
(6) Except as provided in subdivision (k)(4), it is the legislative intent that the effect of this subsection (k) be allocated on a pro rata basis to any affected program or project; and
(7) This subsection (k) shall not apply to revenues generated under § 67-3-201 from the increase in the tax imposed by chapter 181 of the Public Acts of 2017.
(l) Revenues derived under § 67-3-201 from the increase in taxes imposed by chapter 181 of the Public Acts of 2017 shall be apportioned and distributed in the following manner: (1) Twenty-five and four-tenths percent (25.4%) to the various counties of the state on the basis set forth in § 54-4-103 ; (2) Twelve and seven-tenths percent (12.7%) to the various municipalities, as defined by § 54-4-201 , on the basis set forth in § 54-4-203 ; and (3) Sixty-one and nine-tenths percent (61.9%) to the highway fund.
(1) Twenty-five and four-tenths percent (25.4%) to the various counties of the state on the basis set forth in § 54-4-103 ;
(2) Twelve and seven-tenths percent (12.7%) to the various municipalities, as defined by § 54-4-201 , on the basis set forth in § 54-4-203 ; and
(3) Sixty-one and nine-tenths percent (61.9%) to the highway fund.
(m) Notwithstanding any law to the contrary, a county shall be eligible to receive those revenues to be distributed directly to it from the increase in taxes imposed by chapter 181 of the Public Acts of 2017 only if it appropriates and allocates funds for road purposes from local revenue sources in an amount not less than the average of the five (5) preceding fiscal years, except bond issues and federal revenue sharing proceeds shall be excluded from the five-year average computation. If a county fails after July 1, 2017, to so appropriate and allocate at least such average amount for road purposes, then the amount of revenues that would otherwise be allocable to such county under this section shall be reduced by the amount of the decrease below such average. The amount of such funds not allocated to such county because of such decrease shall be allocated to the state highway fund, to be used by the department of transportation for the improvement of state highways in such county, and such state funds shall be in addition to the funds otherwise allocated for improvements in such county in that fiscal year.
Amended by 2024 Tenn. Acts, ch. 660,s 1, eff. 7/1/2024.
Amended by 2023 Tenn. Acts, ch. 463, s 30, eff. 7/1/2023.
Amended by 2022 Tenn. Acts, ch. 1103, s 2, eff. 7/1/2022.
Amended by 2022 Tenn. Acts, ch. 1103, s 1, eff. 7/1/2022.
Amended by 2017 Tenn. Acts, ch. 478, s 2, eff. 7/1/2017.
Amended by 2017 Tenn. Acts, ch. 181, s 20, eff. 7/1/2017.
Amended by 2017 Tenn. Acts, ch. 181, s 19, eff. 7/1/2017.
Acts 1997 , ch. 316, § 1; 1999, ch. 450, § 6; 2000, ch. 654, § 1; 2000, ch. 983, § 4; 2001, ch. 448, § 2; T.C.A., § 67-3-2001.
Tenn. Code Ann. § 67-4-2020 — TN Code / Title 67 / Chapter 4 / Section 67-4-2020
Taxes collected from loan and related companies
Status: in_force

This section does not create or impose a new tax, but shall govern allocation of taxes already collected under this part from financial institutions, including loan or trust companies regulated by the department of financial institutions, which do not have deposit facilities. These taxes shall be allocated as follows: (1) (A) To cities and counties, an amount for each institution with a branch in this state and each "financial institution unitary business" as defined in this section; (B) Three percent (3%) of the net earnings of the institution and the net earnings of a financial institution unitary business determined on a combined basis for the second fiscal year preceding the year in which the distribution under this section is made, less seven percent (7%) of the ad valorem taxes paid by the financial institution or financial institution unitary business on its real and tangible personal property for the second fiscal year preceding the year in which the distribution is made. For purposes of this subdivision (1), "net earnings" does not include amounts attributable to interest earned on bonds and other obligations of this state. As used in this section, "financial institution unitary business" includes only those financial institutions that form a unitary business as defined in § 67-4-2004 , that file a combined franchise, excise tax return in this state and that have at least one (1) member with a branch in this state. The total amount thus determined shall be allocated between the county and municipal governments where the office of the financial institution or financial institution unitary business is located in the same proportion as the property tax rate of each such taxing jurisdiction shall bear to the sum of the property tax rates; (C) In circumstances where a financial institution or financial institution unitary business has more than one (1) branch or office, the total allocation attributable to such financial institution or financial institution unitary business as determined in subdivision (1)(B) shall be further allocated between such counties and cities where its branches or offices are located as follows: (i) The proportionate percentage that is produced by the ratio of outstanding loans and sales contracts receivable in each branch or office of the financial institution or financial institution unitary business to the total outstanding loans and sales contracts receivable of the financial institution or financial institution unitary business shall be determined as of January 1 for each year, and the percentage so determined shall then be applied to the total allocation to determine the portion of the total attributable to each branch or office; (ii) The branches or offices shall then be grouped each to a common location so as to determine the aggregate allocation of all branches or offices located in each individual county and municipality; and (iii) The percentage of the total allocation allowable to each county and municipality shall be divided between the county and municipality where the branch or office is maintained in the same proportion as the property tax rates of each for the second year preceding the year in which the distribution under this section is made shall bear to the total of the property tax rates; (D) The director of the division of property assessments shall provide to the commissioner, periodically on a timely basis, the ad valorem property tax rates for each taxing jurisdiction. The commissioner shall report the amount of such allocations made to each county and municipality to the comptroller of the treasury for audit purposes on an annual basis; (E) The status of each financial institution or financial institution unitary business as of January 1 of the fiscal year for which the allocation is calculated shall be the determining basis; (F) If the net earnings of any financial institution or financial institution unitary business shall be redetermined for any period in accordance with this part, the commissioner shall recalculate the allocation attributable to such financial institution or financial institution unitary business, and any indicated increase or decrease in allocation shall be effected in the next succeeding general allocation to the respective county and municipal governments, as appropriate; (G) The commissioner has the authority and power to prescribe forms upon which all financial institutions or financial institution unitary businesses shall report such facts and information as will enable the department to ascertain the correctness of the allocation. The department has the full power to summon witnesses, to inspect or require the production of books and papers, and to obtain and consider any evidence and records other than the reports submitted by such financial institutions or financial institution unitary businesses that it may deem proper or necessary to carry out its responsibilities under this section. If any financial institution or financial institution unitary business subject to this part fails, refuses or neglects to collect and file such form with the department as provided by this section, the department shall determine the amount of the allocation in regard to such institution on the basis of the best information available; (2) After allocation to counties and municipalities as provided in subdivision (1), the remainder of the taxes collected under this part shall be applied to and become a part of the general fund of the state. Acts 2011 , ch. 438, § 3.
This section does not create or impose a new tax, but shall govern allocation of taxes already collected under this part from financial institutions, including loan or trust companies regulated by the department of financial institutions, which do not have deposit facilities. These taxes shall be allocated as follows:
(1) (A) To cities and counties, an amount for each institution with a branch in this state and each "financial institution unitary business" as defined in this section; (B) Three percent (3%) of the net earnings of the institution and the net earnings of a financial institution unitary business determined on a combined basis for the second fiscal year preceding the year in which the distribution under this section is made, less seven percent (7%) of the ad valorem taxes paid by the financial institution or financial institution unitary business on its real and tangible personal property for the second fiscal year preceding the year in which the distribution is made. For purposes of this subdivision (1), "net earnings" does not include amounts attributable to interest earned on bonds and other obligations of this state. As used in this section, "financial institution unitary business" includes only those financial institutions that form a unitary business as defined in § 67-4-2004 , that file a combined franchise, excise tax return in this state and that have at least one (1) member with a branch in this state. The total amount thus determined shall be allocated between the county and municipal governments where the office of the financial institution or financial institution unitary business is located in the same proportion as the property tax rate of each such taxing jurisdiction shall bear to the sum of the property tax rates; (C) In circumstances where a financial institution or financial institution unitary business has more than one (1) branch or office, the total allocation attributable to such financial institution or financial institution unitary business as determined in subdivision (1)(B) shall be further allocated between such counties and cities where its branches or offices are located as follows: (i) The proportionate percentage that is produced by the ratio of outstanding loans and sales contracts receivable in each branch or office of the financial institution or financial institution unitary business to the total outstanding loans and sales contracts receivable of the financial institution or financial institution unitary business shall be determined as of January 1 for each year, and the percentage so determined shall then be applied to the total allocation to determine the portion of the total attributable to each branch or office; (ii) The branches or offices shall then be grouped each to a common location so as to determine the aggregate allocation of all branches or offices located in each individual county and municipality; and (iii) The percentage of the total allocation allowable to each county and municipality shall be divided between the county and municipality where the branch or office is maintained in the same proportion as the property tax rates of each for the second year preceding the year in which the distribution under this section is made shall bear to the total of the property tax rates; (D) The director of the division of property assessments shall provide to the commissioner, periodically on a timely basis, the ad valorem property tax rates for each taxing jurisdiction. The commissioner shall report the amount of such allocations made to each county and municipality to the comptroller of the treasury for audit purposes on an annual basis; (E) The status of each financial institution or financial institution unitary business as of January 1 of the fiscal year for which the allocation is calculated shall be the determining basis; (F) If the net earnings of any financial institution or financial institution unitary business shall be redetermined for any period in accordance with this part, the commissioner shall recalculate the allocation attributable to such financial institution or financial institution unitary business, and any indicated increase or decrease in allocation shall be effected in the next succeeding general allocation to the respective county and municipal governments, as appropriate; (G) The commissioner has the authority and power to prescribe forms upon which all financial institutions or financial institution unitary businesses shall report such facts and information as will enable the department to ascertain the correctness of the allocation. The department has the full power to summon witnesses, to inspect or require the production of books and papers, and to obtain and consider any evidence and records other than the reports submitted by such financial institutions or financial institution unitary businesses that it may deem proper or necessary to carry out its responsibilities under this section. If any financial institution or financial institution unitary business subject to this part fails, refuses or neglects to collect and file such form with the department as provided by this section, the department shall determine the amount of the allocation in regard to such institution on the basis of the best information available;
(A) To cities and counties, an amount for each institution with a branch in this state and each "financial institution unitary business" as defined in this section;
(B) Three percent (3%) of the net earnings of the institution and the net earnings of a financial institution unitary business determined on a combined basis for the second fiscal year preceding the year in which the distribution under this section is made, less seven percent (7%) of the ad valorem taxes paid by the financial institution or financial institution unitary business on its real and tangible personal property for the second fiscal year preceding the year in which the distribution is made. For purposes of this subdivision (1), "net earnings" does not include amounts attributable to interest earned on bonds and other obligations of this state. As used in this section, "financial institution unitary business" includes only those financial institutions that form a unitary business as defined in § 67-4-2004 , that file a combined franchise, excise tax return in this state and that have at least one (1) member with a branch in this state. The total amount thus determined shall be allocated between the county and municipal governments where the office of the financial institution or financial institution unitary business is located in the same proportion as the property tax rate of each such taxing jurisdiction shall bear to the sum of the property tax rates;
(C) In circumstances where a financial institution or financial institution unitary business has more than one (1) branch or office, the total allocation attributable to such financial institution or financial institution unitary business as determined in subdivision (1)(B) shall be further allocated between such counties and cities where its branches or offices are located as follows: (i) The proportionate percentage that is produced by the ratio of outstanding loans and sales contracts receivable in each branch or office of the financial institution or financial institution unitary business to the total outstanding loans and sales contracts receivable of the financial institution or financial institution unitary business shall be determined as of January 1 for each year, and the percentage so determined shall then be applied to the total allocation to determine the portion of the total attributable to each branch or office; (ii) The branches or offices shall then be grouped each to a common location so as to determine the aggregate allocation of all branches or offices located in each individual county and municipality; and (iii) The percentage of the total allocation allowable to each county and municipality shall be divided between the county and municipality where the branch or office is maintained in the same proportion as the property tax rates of each for the second year preceding the year in which the distribution under this section is made shall bear to the total of the property tax rates;
(i) The proportionate percentage that is produced by the ratio of outstanding loans and sales contracts receivable in each branch or office of the financial institution or financial institution unitary business to the total outstanding loans and sales contracts receivable of the financial institution or financial institution unitary business shall be determined as of January 1 for each year, and the percentage so determined shall then be applied to the total allocation to determine the portion of the total attributable to each branch or office;
(ii) The branches or offices shall then be grouped each to a common location so as to determine the aggregate allocation of all branches or offices located in each individual county and municipality; and
(iii) The percentage of the total allocation allowable to each county and municipality shall be divided between the county and municipality where the branch or office is maintained in the same proportion as the property tax rates of each for the second year preceding the year in which the distribution under this section is made shall bear to the total of the property tax rates;
(D) The director of the division of property assessments shall provide to the commissioner, periodically on a timely basis, the ad valorem property tax rates for each taxing jurisdiction. The commissioner shall report the amount of such allocations made to each county and municipality to the comptroller of the treasury for audit purposes on an annual basis;
(E) The status of each financial institution or financial institution unitary business as of January 1 of the fiscal year for which the allocation is calculated shall be the determining basis;
(F) If the net earnings of any financial institution or financial institution unitary business shall be redetermined for any period in accordance with this part, the commissioner shall recalculate the allocation attributable to such financial institution or financial institution unitary business, and any indicated increase or decrease in allocation shall be effected in the next succeeding general allocation to the respective county and municipal governments, as appropriate;
(G) The commissioner has the authority and power to prescribe forms upon which all financial institutions or financial institution unitary businesses shall report such facts and information as will enable the department to ascertain the correctness of the allocation. The department has the full power to summon witnesses, to inspect or require the production of books and papers, and to obtain and consider any evidence and records other than the reports submitted by such financial institutions or financial institution unitary businesses that it may deem proper or necessary to carry out its responsibilities under this section. If any financial institution or financial institution unitary business subject to this part fails, refuses or neglects to collect and file such form with the department as provided by this section, the department shall determine the amount of the allocation in regard to such institution on the basis of the best information available;
(2) After allocation to counties and municipalities as provided in subdivision (1), the remainder of the taxes collected under this part shall be applied to and become a part of the general fund of the state.
Acts 2011 , ch. 438, § 3.
Tenn. Code Ann. § 67-6-536 — TN Code / Title 67 / Chapter 6 / Section 67-6-536
Returns submitted by Model 1 and 2 sellers - Informational return - Electronic payments - Due dates
Status: in_force

(a) Model 1 or 2 sellers with business locations in this state shall submit their returns in a format required by the commissioner. Model 1 or 2 sellers that do not have business locations in this state may submit their returns in a format adopted by the member states to the Streamlined Sales and Use Tax Agreement; provided, however, that all of the returns shall be filed electronically. (b) Notwithstanding any law to the contrary, the commissioner is authorized to require Model 1 or 2 sellers that submit returns in a format adopted by the member states to the Streamlined Sales and Use Tax Agreement to submit once a year an informational return as permitted by the member states to the Streamlined Sales and Use Tax Agreement. (c) Notwithstanding the provisions of § 67-1-703 to the contrary, all remittances from Model 1 or 2 sellers shall be made electronically, using ACH Credit or ACH Debit processes. The commissioner is authorized to provide for an alternative method of making the payment in the event the electronic funds transfer process fails. (d) Notwithstanding any law to the contrary, a seller that is registered using the central registration system provided by states that are members of the Streamlined Sales and Use Tax Agreement, does not have a legal requirement to register in this state, is not a Model 1 or 2 seller, and has not accumulated more than one thousand dollars ($1,000) in state and local sales and use taxes shall be permitted to file a sales and use tax return at any time within one (1) year of the month of initial registration and shall be permitted to file future returns on an annual basis in succeeding years. The returns shall be due the twentieth day of the month following the tax period covered by the return. A seller that has accumulated state and local sales and use tax funds in the amount of one thousand dollars ($1,000) shall file a return by the twentieth day of the month following the month in which the accumulated taxes reach or exceed one thousand dollars ($1,000). Nothing in this subsection (d) shall relieve a seller who collects state sales or use tax from its customers from liability for failure to pay over those funds to the commissioner on behalf of the state. Amended by 2021 Tenn. Acts, ch. 285, s 2, eff. 4/30/2021. Amended by 2019 Tenn. Acts, ch. 157, s 1, eff. 4/23/2019. Acts 2003 , ch. 357, § 61; 2004, ch. 959, §§ 21, 68; 2005, ch. 311, §§ 1, 2; 2007 , ch. 602, §§ 51, 113, 161; 2009 , ch. 530, § 35; 2011 , ch. 72, § 1; 2013 , ch. 480, § 1; 2015 , ch. 273, § 3.
(a) Model 1 or 2 sellers with business locations in this state shall submit their returns in a format required by the commissioner. Model 1 or 2 sellers that do not have business locations in this state may submit their returns in a format adopted by the member states to the Streamlined Sales and Use Tax Agreement; provided, however, that all of the returns shall be filed electronically.
(b) Notwithstanding any law to the contrary, the commissioner is authorized to require Model 1 or 2 sellers that submit returns in a format adopted by the member states to the Streamlined Sales and Use Tax Agreement to submit once a year an informational return as permitted by the member states to the Streamlined Sales and Use Tax Agreement.
(c) Notwithstanding the provisions of § 67-1-703 to the contrary, all remittances from Model 1 or 2 sellers shall be made electronically, using ACH Credit or ACH Debit processes. The commissioner is authorized to provide for an alternative method of making the payment in the event the electronic funds transfer process fails.
(d) Notwithstanding any law to the contrary, a seller that is registered using the central registration system provided by states that are members of the Streamlined Sales and Use Tax Agreement, does not have a legal requirement to register in this state, is not a Model 1 or 2 seller, and has not accumulated more than one thousand dollars ($1,000) in state and local sales and use taxes shall be permitted to file a sales and use tax return at any time within one (1) year of the month of initial registration and shall be permitted to file future returns on an annual basis in succeeding years. The returns shall be due the twentieth day of the month following the tax period covered by the return. A seller that has accumulated state and local sales and use tax funds in the amount of one thousand dollars ($1,000) shall file a return by the twentieth day of the month following the month in which the accumulated taxes reach or exceed one thousand dollars ($1,000). Nothing in this subsection (d) shall relieve a seller who collects state sales or use tax from its customers from liability for failure to pay over those funds to the commissioner on behalf of the state.
Amended by 2021 Tenn. Acts, ch. 285, s 2, eff. 4/30/2021.
Amended by 2019 Tenn. Acts, ch. 157, s 1, eff. 4/23/2019.
Acts 2003 , ch. 357, § 61; 2004, ch. 959, §§ 21, 68; 2005, ch. 311, §§ 1, 2; 2007 , ch. 602, §§ 51, 113, 161; 2009 , ch. 530, § 35; 2011 , ch. 72, § 1; 2013 , ch. 480, § 1; 2015 , ch. 273, § 3.
Tenn. Code Ann. § 67-4-1032 — TN Code / Title 67 / Chapter 4 / Section 67-4-1032
Cigarette rolling machine operators
Status: in_force

(a) On and after October 1, 2013, no cigarette rolling machine operator shall: (1) Use, offer for use, or allow to be used in its cigarette rolling machines any tobacco other than roll-your-own tobacco that is currently listed on the directory maintained by the commissioner pursuant to § 67-4-2602 ; (2) Possess any loose tobacco other than roll-your-own tobacco that is currently listed on the directory maintained by the commissioner pursuant to § 67-4-2602 ; (3) Possess more than sixteen ounces (16 oz.) per cigarette rolling machine of loose tobacco of any brand within a directory-approved roll-your-own brand family at any given time; or (4) Accept or allow the operator's cigarette rolling machine to be used to process cigarettes with tobacco that was not first purchased or obtained from the cigarette rolling machine operator. (b) (1) Any cigarette rolling machine purchased or leased for use, or controlled, possessed or maintained by a cigarette rolling machine operator must contain a secure meter that: (A) Counts the number of cigarettes made, manufactured, or fabricated by the machine; and (B) Cannot be altered by the cigarette rolling machine operator. (2) Upon request by the commissioner, a cigarette rolling machine operator shall provide the information contained on the secure meter. The cigarette rolling machine operator shall maintain the information contained on the secure meter for a period of seven (7) years from the date of each transaction. (c) In addition to or in lieu of any other civil or criminal remedy provided by law: (1) The commissioner may revoke or suspend a license issued to a cigarette rolling machine operator under this part if the cigarette rolling machine operator has violated this section, or any rule adopted pursuant to this section, as provided by § 67-4-1016 and in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5; and (2) For each violation of this section, or any rule adopted pursuant to this section, the commissioner may impose a civil penalty in an amount not to exceed the greater of five hundred percent (500%) of the retail value of the tobacco that is sold, offered for sale, or possessed for sale in violation of this section or five thousand dollars ($5,000). Such penalty shall be imposed in the manner provided by § 67-4-1015 and in accordance with the Uniform Administrative Procedures Act. (d) Any tobacco that has been sold, offered for sale, or possessed for sale by the cigarette rolling machine operator in violation of this section shall be deemed contraband and is subject to seizure and forfeiture by the commissioner as provided in §§ 67-4-1020 and 67-4-1021 . (e) In lieu of the reporting requirements contained in § 67-4-2604(a) , the commissioner may require, upon request, a cigarette rolling machine operator to submit any additional information as is necessary to enable the commissioner to determine whether a cigarette rolling machine operator is in compliance with this part. Acts 2012, ch. 1066, § 8.
(a) On and after October 1, 2013, no cigarette rolling machine operator shall: (1) Use, offer for use, or allow to be used in its cigarette rolling machines any tobacco other than roll-your-own tobacco that is currently listed on the directory maintained by the commissioner pursuant to § 67-4-2602 ; (2) Possess any loose tobacco other than roll-your-own tobacco that is currently listed on the directory maintained by the commissioner pursuant to § 67-4-2602 ; (3) Possess more than sixteen ounces (16 oz.) per cigarette rolling machine of loose tobacco of any brand within a directory-approved roll-your-own brand family at any given time; or (4) Accept or allow the operator's cigarette rolling machine to be used to process cigarettes with tobacco that was not first purchased or obtained from the cigarette rolling machine operator.
(1) Use, offer for use, or allow to be used in its cigarette rolling machines any tobacco other than roll-your-own tobacco that is currently listed on the directory maintained by the commissioner pursuant to § 67-4-2602 ;
(2) Possess any loose tobacco other than roll-your-own tobacco that is currently listed on the directory maintained by the commissioner pursuant to § 67-4-2602 ;
(3) Possess more than sixteen ounces (16 oz.) per cigarette rolling machine of loose tobacco of any brand within a directory-approved roll-your-own brand family at any given time; or
(4) Accept or allow the operator's cigarette rolling machine to be used to process cigarettes with tobacco that was not first purchased or obtained from the cigarette rolling machine operator.
(b) (1) Any cigarette rolling machine purchased or leased for use, or controlled, possessed or maintained by a cigarette rolling machine operator must contain a secure meter that: (A) Counts the number of cigarettes made, manufactured, or fabricated by the machine; and (B) Cannot be altered by the cigarette rolling machine operator. (2) Upon request by the commissioner, a cigarette rolling machine operator shall provide the information contained on the secure meter. The cigarette rolling machine operator shall maintain the information contained on the secure meter for a period of seven (7) years from the date of each transaction.
(1) Any cigarette rolling machine purchased or leased for use, or controlled, possessed or maintained by a cigarette rolling machine operator must contain a secure meter that: (A) Counts the number of cigarettes made, manufactured, or fabricated by the machine; and (B) Cannot be altered by the cigarette rolling machine operator.
(A) Counts the number of cigarettes made, manufactured, or fabricated by the machine; and
(B) Cannot be altered by the cigarette rolling machine operator.
(2) Upon request by the commissioner, a cigarette rolling machine operator shall provide the information contained on the secure meter. The cigarette rolling machine operator shall maintain the information contained on the secure meter for a period of seven (7) years from the date of each transaction.
(c) In addition to or in lieu of any other civil or criminal remedy provided by law: (1) The commissioner may revoke or suspend a license issued to a cigarette rolling machine operator under this part if the cigarette rolling machine operator has violated this section, or any rule adopted pursuant to this section, as provided by § 67-4-1016 and in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5; and (2) For each violation of this section, or any rule adopted pursuant to this section, the commissioner may impose a civil penalty in an amount not to exceed the greater of five hundred percent (500%) of the retail value of the tobacco that is sold, offered for sale, or possessed for sale in violation of this section or five thousand dollars ($5,000). Such penalty shall be imposed in the manner provided by § 67-4-1015 and in accordance with the Uniform Administrative Procedures Act.
(1) The commissioner may revoke or suspend a license issued to a cigarette rolling machine operator under this part if the cigarette rolling machine operator has violated this section, or any rule adopted pursuant to this section, as provided by § 67-4-1016 and in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5; and
(2) For each violation of this section, or any rule adopted pursuant to this section, the commissioner may impose a civil penalty in an amount not to exceed the greater of five hundred percent (500%) of the retail value of the tobacco that is sold, offered for sale, or possessed for sale in violation of this section or five thousand dollars ($5,000). Such penalty shall be imposed in the manner provided by § 67-4-1015 and in accordance with the Uniform Administrative Procedures Act.
(d) Any tobacco that has been sold, offered for sale, or possessed for sale by the cigarette rolling machine operator in violation of this section shall be deemed contraband and is subject to seizure and forfeiture by the commissioner as provided in §§ 67-4-1020 and 67-4-1021 .
(e) In lieu of the reporting requirements contained in § 67-4-2604(a) , the commissioner may require, upon request, a cigarette rolling machine operator to submit any additional information as is necessary to enable the commissioner to determine whether a cigarette rolling machine operator is in compliance with this part.
Acts 2012, ch. 1066, § 8.
Tenn. Code Ann. § 67-6-701 — TN Code / Title 67 / Chapter 6 / Section 67-6-701
Short title - Nature of tax
Status: in_force

(a) This part shall be known and may be cited as the "1963 Local Option Revenue Act." (b) The tax authorized by this part is and shall be in addition to all other taxes which counties, cities and towns are now authorized to levy, whether levied in the form of excise, license, or privilege taxes, and shall be in addition to all other fees and taxes now authorized to be levied. Acts 1963, ch. 329, §§ 1, 8; T.C.A., §§ 67-3049, 67-3056.
(a) This part shall be known and may be cited as the "1963 Local Option Revenue Act."
(b) The tax authorized by this part is and shall be in addition to all other taxes which counties, cities and towns are now authorized to levy, whether levied in the form of excise, license, or privilege taxes, and shall be in addition to all other fees and taxes now authorized to be levied.
Acts 1963, ch. 329, §§ 1, 8; T.C.A., §§ 67-3049, 67-3056.
Tenn. Code Ann. § 67-4-305 — TN Code / Title 67 / Chapter 4 / Section 67-4-305
Credits for franchise and excise taxes
Status: in_force

Notwithstanding any other provisions of either part 4, 5 or 6 of this chapter, any person paying gross receipts privilege taxes under provisions of either part 4, 5 or 6 of this chapter, and who is entitled to credit against such taxes for franchise and excise taxes paid, shall be allowed such credit when final annual reports of both gross receipts taxes and franchise and excise taxes have been filed covering the corresponding tax base period; provided, that a taxpayer who has obtained an extension of time beyond August 1, within which to file the franchise and excise tax return for the taxpayer's most recently completed fiscal year ended prior to July 1, shall be allowed credit for all payments of franchise and excise taxes made for such corresponding tax base period. Acts 1937, ch. 108, art. 3, § 2; C. Supp. 1950, § 1248.5 (Williams, § 1248.138); impl. am. Acts 1959, ch. 9, § 14; Acts 1963, ch. 269, § 1; 1973, ch. 20, § 2; T.C.A. (orig. ed.), § 67-4315.
Notwithstanding any other provisions of either part 4, 5 or 6 of this chapter, any person paying gross receipts privilege taxes under provisions of either part 4, 5 or 6 of this chapter, and who is entitled to credit against such taxes for franchise and excise taxes paid, shall be allowed such credit when final annual reports of both gross receipts taxes and franchise and excise taxes have been filed covering the corresponding tax base period; provided, that a taxpayer who has obtained an extension of time beyond August 1, within which to file the franchise and excise tax return for the taxpayer's most recently completed fiscal year ended prior to July 1, shall be allowed credit for all payments of franchise and excise taxes made for such corresponding tax base period.
Acts 1937, ch. 108, art. 3, § 2; C. Supp. 1950, § 1248.5 (Williams, § 1248.138); impl. am. Acts 1959, ch. 9, § 14; Acts 1963, ch. 269, § 1; 1973, ch. 20, § 2; T.C.A. (orig. ed.), § 67-4315.
Tenn. Code Ann. § 67-4-905 — TN Code / Title 67 / Chapter 4 / Section 67-4-905
Distribution of taxes
Status: in_force

Of the taxes, including all penalties and interest, received by the commissioner under this part, the distribution shall be as follows: (1) (A) From July 1, 2016, to June 30, 2017, sixty percent (60%) shall be allocated to the general fund; and (B) Beginning July 1, 2017, and thereafter, sixty-eight percent (68%) shall be allocated to the general fund; (2) Twenty percent (20%) shall be allocated among the counties of the state in the proportion that the population of each bears to the aggregate population of the state according to the most recent federal census and other censuses authorized by law; (3) Ten percent (10%) must be allocated to the fantasy sports fund established by § 4-49-207 ; and (4) (A) From July 1, 2016, to June 30, 2017, ten percent (10%) shall be allocated to the department of revenue for administration of this part; and (B) Beginning July 1, 2017, and thereafter, two percent (2%) shall be allocated to the department of revenue for administration of this part. Amended by 2023 Tenn. Acts, ch. 143, s 9, eff. 7/1/2023. Added by 2016 Tenn. Acts, ch. 978, s 4, eff. 7/1/2016.
Of the taxes, including all penalties and interest, received by the commissioner under this part, the distribution shall be as follows:
(1) (A) From July 1, 2016, to June 30, 2017, sixty percent (60%) shall be allocated to the general fund; and (B) Beginning July 1, 2017, and thereafter, sixty-eight percent (68%) shall be allocated to the general fund;
(A) From July 1, 2016, to June 30, 2017, sixty percent (60%) shall be allocated to the general fund; and
(B) Beginning July 1, 2017, and thereafter, sixty-eight percent (68%) shall be allocated to the general fund;
(2) Twenty percent (20%) shall be allocated among the counties of the state in the proportion that the population of each bears to the aggregate population of the state according to the most recent federal census and other censuses authorized by law;
(3) Ten percent (10%) must be allocated to the fantasy sports fund established by § 4-49-207 ; and
(4) (A) From July 1, 2016, to June 30, 2017, ten percent (10%) shall be allocated to the department of revenue for administration of this part; and (B) Beginning July 1, 2017, and thereafter, two percent (2%) shall be allocated to the department of revenue for administration of this part.
(A) From July 1, 2016, to June 30, 2017, ten percent (10%) shall be allocated to the department of revenue for administration of this part; and
(B) Beginning July 1, 2017, and thereafter, two percent (2%) shall be allocated to the department of revenue for administration of this part.
Amended by 2023 Tenn. Acts, ch. 143, s 9, eff. 7/1/2023.
Added by 2016 Tenn. Acts, ch. 978, s 4, eff. 7/1/2016.
Tenn. Code Ann. § 67-1-108 — TN Code / Title 67 / Chapter 1 / Section 67-1-108
Implementation and enforcement by commissioner - Guidance - Erroneous audit findings or advice - Applicability of taxability policy changes - Effect of provision
Status: in_force

(a) It is the commissioner's duty to implement and enforce the laws administered by the commissioner under this or any other title. The commissioner shall enforce these laws in a manner consistent with all applicable statutes, rules, and regulations. When the commissioner publishes guidance regarding the taxability of any privilege, affected taxpayers are entitled to rely on the guidance. If the commissioner changes the guidance, then a taxpayer who relied on the guidance before it was changed is not liable for any assessment of additional tax, interest, or penalty that accrued before the guidance was changed and was unpaid because of the taxpayer's reasonable reliance upon the guidance. (b) If a taxpayer is either audited by the department or requests specific advice from the department and receives erroneous audit findings or advice, then the taxpayer is not liable for any assessment of additional tax, interest, or penalty attributable to the erroneous finding or advice furnished by the department, to the extent the following conditions are all satisfied: (1) The finding or advice was reasonably relied upon by the taxpayer. In determining whether the reliance was reasonable, the taxpayer is deemed to be aware of any changes in applicable law that occurred after the finding or advice was furnished by the department; (2) The additional assessment did not result from the taxpayer's failure to provide adequate or accurate information; and (3) The department provided the finding or advice to the taxpayer in writing or the department's records establish that the department provided erroneous verbal advice to the taxpayer. In furtherance of this condition, the department shall adopt formal audit procedures to allow taxpayers the right to memorialize audit findings in the final audit document prepared by the audit division upon completion of the audit. (c) If the commissioner changes the policy of the department as to the taxability of any privilege, then the policy change must be applied to the exercise of those privileges occurring after the date of the policy change only, unless otherwise provided by law. (d) The commissioner is encouraged to continue providing and publishing guidance and advice to taxpayers to assist with compliance with this state's tax statutes. Except as specifically provided in this section, the issuance of guidance, advice, or audit findings by the commissioner does not constitute new or revised enforcement of the law. (e) This section is intended only to prevent audit assessments against taxpayers that reasonably relied upon guidance, advice, or prior findings communicated to the taxpayer by the department. Such guidance, advice, or findings do not have the force and effect of law and do not independently establish a basis for a claim for refund under § 67-1-1802 . Any claim for refund must be based on applicable statutes, rules, and regulations. (f) The department shall designate as public guidance applicable, published manuals, notices, and statements. (g) As used in this section: (1) "Audit finding" or "finding": (A) Means the specific conclusions contained in the final document written by the audit division or hearing office and presented to the taxpayer upon completion of an audit or an informal conference conducted to review an audit; (B) Includes findings memorialized in the final document written by the audit division pursuant to the procedures established under subdivision (b)(3); and (C) Does not include the issuance of a license, certificate, or application approval; (2) "Published" means displayed on the department's website; and (3) "Published guidance" or "guidance": (A) Means tax manuals, important notices, statements presented in a question-and-answer format, or other substantive statements regarding the taxability of a privilege that are published on the department's website; and (B) Does not include verbal comments from an auditor or letter rulings or revenue rulings, as described in § 67-1-109 , that are redacted and placed on the department's website. Amended by 2021 Tenn. Acts, ch. 214, s 1, eff. 7/1/2021. Acts 1986, ch. 552, § 1.
(a) It is the commissioner's duty to implement and enforce the laws administered by the commissioner under this or any other title. The commissioner shall enforce these laws in a manner consistent with all applicable statutes, rules, and regulations. When the commissioner publishes guidance regarding the taxability of any privilege, affected taxpayers are entitled to rely on the guidance. If the commissioner changes the guidance, then a taxpayer who relied on the guidance before it was changed is not liable for any assessment of additional tax, interest, or penalty that accrued before the guidance was changed and was unpaid because of the taxpayer's reasonable reliance upon the guidance.
(b) If a taxpayer is either audited by the department or requests specific advice from the department and receives erroneous audit findings or advice, then the taxpayer is not liable for any assessment of additional tax, interest, or penalty attributable to the erroneous finding or advice furnished by the department, to the extent the following conditions are all satisfied: (1) The finding or advice was reasonably relied upon by the taxpayer. In determining whether the reliance was reasonable, the taxpayer is deemed to be aware of any changes in applicable law that occurred after the finding or advice was furnished by the department; (2) The additional assessment did not result from the taxpayer's failure to provide adequate or accurate information; and (3) The department provided the finding or advice to the taxpayer in writing or the department's records establish that the department provided erroneous verbal advice to the taxpayer. In furtherance of this condition, the department shall adopt formal audit procedures to allow taxpayers the right to memorialize audit findings in the final audit document prepared by the audit division upon completion of the audit.
(1) The finding or advice was reasonably relied upon by the taxpayer. In determining whether the reliance was reasonable, the taxpayer is deemed to be aware of any changes in applicable law that occurred after the finding or advice was furnished by the department;
(2) The additional assessment did not result from the taxpayer's failure to provide adequate or accurate information; and
(3) The department provided the finding or advice to the taxpayer in writing or the department's records establish that the department provided erroneous verbal advice to the taxpayer. In furtherance of this condition, the department shall adopt formal audit procedures to allow taxpayers the right to memorialize audit findings in the final audit document prepared by the audit division upon completion of the audit.
(c) If the commissioner changes the policy of the department as to the taxability of any privilege, then the policy change must be applied to the exercise of those privileges occurring after the date of the policy change only, unless otherwise provided by law.
(d) The commissioner is encouraged to continue providing and publishing guidance and advice to taxpayers to assist with compliance with this state's tax statutes. Except as specifically provided in this section, the issuance of guidance, advice, or audit findings by the commissioner does not constitute new or revised enforcement of the law.
(e) This section is intended only to prevent audit assessments against taxpayers that reasonably relied upon guidance, advice, or prior findings communicated to the taxpayer by the department. Such guidance, advice, or findings do not have the force and effect of law and do not independently establish a basis for a claim for refund under § 67-1-1802 . Any claim for refund must be based on applicable statutes, rules, and regulations.
(f) The department shall designate as public guidance applicable, published manuals, notices, and statements.
(g) As used in this section: (1) "Audit finding" or "finding": (A) Means the specific conclusions contained in the final document written by the audit division or hearing office and presented to the taxpayer upon completion of an audit or an informal conference conducted to review an audit; (B) Includes findings memorialized in the final document written by the audit division pursuant to the procedures established under subdivision (b)(3); and (C) Does not include the issuance of a license, certificate, or application approval; (2) "Published" means displayed on the department's website; and (3) "Published guidance" or "guidance": (A) Means tax manuals, important notices, statements presented in a question-and-answer format, or other substantive statements regarding the taxability of a privilege that are published on the department's website; and (B) Does not include verbal comments from an auditor or letter rulings or revenue rulings, as described in § 67-1-109 , that are redacted and placed on the department's website.
(1) "Audit finding" or "finding": (A) Means the specific conclusions contained in the final document written by the audit division or hearing office and presented to the taxpayer upon completion of an audit or an informal conference conducted to review an audit; (B) Includes findings memorialized in the final document written by the audit division pursuant to the procedures established under subdivision (b)(3); and (C) Does not include the issuance of a license, certificate, or application approval;
(A) Means the specific conclusions contained in the final document written by the audit division or hearing office and presented to the taxpayer upon completion of an audit or an informal conference conducted to review an audit;
(B) Includes findings memorialized in the final document written by the audit division pursuant to the procedures established under subdivision (b)(3); and
(C) Does not include the issuance of a license, certificate, or application approval;
(2) "Published" means displayed on the department's website; and
(3) "Published guidance" or "guidance": (A) Means tax manuals, important notices, statements presented in a question-and-answer format, or other substantive statements regarding the taxability of a privilege that are published on the department's website; and (B) Does not include verbal comments from an auditor or letter rulings or revenue rulings, as described in § 67-1-109 , that are redacted and placed on the department's website.
(A) Means tax manuals, important notices, statements presented in a question-and-answer format, or other substantive statements regarding the taxability of a privilege that are published on the department's website; and
(B) Does not include verbal comments from an auditor or letter rulings or revenue rulings, as described in § 67-1-109 , that are redacted and placed on the department's website.
Amended by 2021 Tenn. Acts, ch. 214, s 1, eff. 7/1/2021.
Acts 1986, ch. 552, § 1.
Tenn. Code Ann. § 67-5-1207 — TN Code / Title 67 / Chapter 5 / Section 67-5-1207
Minimum assessment
Status: in_force

In no event shall the assessment of the balance of the corporate property and capital stock of any company under § 67-5-1203(b) , in any year up to and including the year 1980, be less than the assessment of the shares of stock of such company for the year 1967, under this part, or, in the case of a corporation which is the continuing corporation resulting from a merger or consolidation, less than the aggregate assessment of the shares of stock of all its predecessor corporations for the year 1967, under this part. Acts 1968, ch. 431, § 7; T.C.A., § 67-735.
In no event shall the assessment of the balance of the corporate property and capital stock of any company under § 67-5-1203(b) , in any year up to and including the year 1980, be less than the assessment of the shares of stock of such company for the year 1967, under this part, or, in the case of a corporation which is the continuing corporation resulting from a merger or consolidation, less than the aggregate assessment of the shares of stock of all its predecessor corporations for the year 1967, under this part.
Acts 1968, ch. 431, § 7; T.C.A., § 67-735.