Where Principal Business of Taxpayer Is That of a Common Carrier of Persons or Property for Hire or of an Insurance Company — Apportionment of Net Worth

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  2. Tennessee Code
  3. Taxes and Licenses
  4. Privilege and Excise Taxes
  5. Franchise Tax Law of 1999
  6. Where Principal Business of Taxpayer Is That of a Common Carrier of Persons or Property for Hire or of an Insurance Company — Apportionment of Net Worth

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If a taxpayer's principal business in this state is that of a common carrier of persons or property for hire, or of an insurance company, the taxpayer's net worth shall be apportioned to Tennessee on the basis of the following ratios:

  1. Railroads.  The ratio obtained by taking the arithmetical average of the following two (2) ratios:
    1. The gross receipts from railway operations on business beginning and ending in this state without entering or passing through any other state as compared with its gross receipts from such operations in and outside the state; and
    2. The mileage owned and operated in Tennessee plus mileage leased and operated in Tennessee as compared with the total of such mileage in and outside this state;
  2. Motor Carriers.  The ratio obtained by taking the arithmetical average of the following two (2) ratios:
    1. The gross receipts from operations on business beginning and ending inside this state without entering or passing through any other state as compared with its entire gross receipts from such operations in and outside the state; and
    2. The ratio of the total franchise miles or odometer miles, if there are no franchise miles, to which it holds or uses under lease, contract or otherwise, certificates of convenience and necessity from the interstate commerce commission or the department of safety inside the state, to the total franchise, or odometer, miles that it holds or uses under such certificates from the commissions, and like commissions, departments or agencies of other states, in and outside the state, all as shown by the annual reports made by the corporation to the various commissions from which it holds certificates;
  3. Rail and Motor Carriers.  Where the taxpayer is engaged in transporting passengers and property by both rail and motor, then the ratio of the sum of the miles in the state as computed under subdivisions (1) and (2), to the sum of the miles under the subdivisions in and outside the state;
  4. Pipelines.  The ratio obtained by taking the arithmetical average of the following two (2) ratios:
    1. The gross receipts from operations on business beginning and ending inside the state without entering or passing through any other state as compared with its entire gross receipts from such operations in and outside the state; and
    2. The ratio of the pipeline miles owned or operated or owned and operated in the state to the miles of pipelines owned or operated or owned and operated in and outside the state;
    1. Insurance Companies Domiciled in Tennessee.  The ratio of the premiums on policies, persons and property in this state to total premiums;
    2. Insurance Companies Not Domiciled in Tennessee.  The ratio of premiums on policies, persons and property in this state to total premiums, except that annuity considerations shall be excluded from the numerator and denominator of the ratio;
  6. Air Carriers.  The ratio obtained by taking the arithmetical average of the following two (2) ratios:
    1. The originating revenue inside the state as compared with the entire originating revenue in and outside the state; and
    2. The ratio of the total air miles flown in the state to the total air miles flown in and outside the state. Air miles flown in the state shall only include miles in the state from flights originating from or ending in the state, or both originating from and ending in the state;
  7. Air Express Carriers.  The ratio obtained by taking the arithmetical average of the following two (2) ratios:
    1. The originating revenue in the state as compared with the entire originating revenue in and outside the state; and
    2. The ratio of the total air miles flown and ground miles traveled in the state to the total air miles flown and ground miles traveled in and outside the state. Air miles flown in the state shall only include miles in the state from flights originating from or ending in the state, or both originating from and ending in the state. Ground miles traveled in the state or traveled in and outside the state shall only include miles traveled with respect to the actual common carriage of persons or property for hire; and
  8. Barges.  The ratio obtained by taking the arithmetical average of the following two (2) ratios:
    1. The revenue from the transportation of cargo loaded in this state as compared with the entire revenue from the transportation of cargo loaded in and outside the state; and
      1. The ratio of the total miles operated in the state to the total miles operated in and outside the state. Miles operated in the state shall be fifty percent (50%) of the miles operated on the Mississippi River adjacent to the Tennessee shoreline, plus all miles operated on inland waterways within the state;
      2. “Mile operated” means one (1) mile of movement of each barge.


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