Court Opinion

ID: 5063977
Source: CourtListenerOpinion
Date Created: 2021-10-01 09:39:51.412021+00
Date Added: 2024-06-11T08:19:32.845805
License: Public Domain

HARBISON, Justice,
dissenting.
I respectfully dissent.
T.C.A. § 67-4-906(a)(l) provides that the measure of franchise tax
“shall in no case be less than the actual value of the property owned, or property used, in Tennessee.”
While it is true that the franchise tax is not an ad valorem tax, the minimum tax base is fixed by “actual value” of property used or owned by the taxpayer. Had the corporate taxpayer in this ease held title to the apartment buildings involved, their actual value, not their net equity, would have been used in computing the franchise tax base. The same is true of property leased or rented to a taxpayer, although there are specific provisions in the statutes for computing the value of rented property. T.C.A. §§ 67-4-906(a)(3), (4), and 67-4-906(b).
It is true that in the case of Tollett v. Franklin Equities, Inc., 586 S.W.2d 96 (Tenn.1979), the Court held that the statutes did not provide for attribution or imputation of ownership to the corporate taxpayer. That case, however, did not involve questions of the valuation of properties used by the corporate taxpayer, and nothing therein is inconsistent with the Commissioner’s assessment of the property used by the taxpayer in the present case. The thrust of Tollett v. Franklin Equities, Inc., supra, was to prevent corporate taxpayers from avoiding the franchise tax through the use of non-corporate subsidiaries. In that case it was claimed that the assets involved were totally beyond the *821reach of the franchise tax statutes. This Court held to the contrary.
Unless, however, assets held by subsidiary partnerships or joint ventures are included at their actual value, the purposes of T.C.A. § 67-4-906 will be frustrated, and the holding of the Court in the Tollett case, supra, could be essentially negated.
For these reasons, I would affirm the judgment of the Chancellor. I am authorized to state that Justice Cooper joins in this dissent.