(a) To the extent that they constitute nonbusiness earnings, rents and royalties from real or tangible personal property, capital gains, interest, dividends, or patent or copyright royalties shall be allocated as provided in this section.
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Terms Used In Tennessee Code 67-4-2011

  • Commercial domicile: means the principal place from which the trade or business of a business entity is directed or managed. See Tennessee Code 67-4-2004
  • Nonbusiness earnings: means all earnings other than business earnings. See Tennessee Code 67-4-2004
  • Personal property: All property that is not real property.
  • Personal property: includes money, goods, chattels, things in action, and evidences of debt. See Tennessee Code 1-3-105
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • real property: include lands, tenements and hereditaments, and all rights thereto and interests therein, equitable as well as legal. See Tennessee Code 1-3-105
  • Sales: means all gross receipts of the taxpayer not allocated under this part. See Tennessee Code 67-4-2004
  • State: means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States and any foreign country or political subdivision thereof. See Tennessee Code 67-4-2004
  • taxpayer: means every corporation, subchapter S corporation, limited liability company, professional limited liability company, registered limited liability partnership, professional registered limited liability partnership, limited partnership, cooperative, joint-stock association, business trust, regulated investment company, REIT, state-chartered or national bank, or state-chartered or federally chartered savings and loan association. See Tennessee Code 67-4-2004
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(b)

(1) Net rents and royalties from real property located in this state are allocable to this state.
(2) Net rents and royalties from tangible personal property are allocable to this state:

(A) If and to the extent that the property is utilized in this state; or
(B) In their entirety, if the taxpayer‘s commercial domicile is in this state and the taxpayer is not organized under the laws of or taxable in the state in which the property is utilized.
(3) The extent of utilization of tangible personal property in a state is determined by multiplying the rents and royalties by a fraction, the numerator of which is the number of days of physical location of the property in the state during the rental or royalty period in the taxable year, and the denominator of which is the number of days of physical location of the property everywhere during all rental or royalty periods in the taxable year. If the physical location of the property during the rental or royalty period is unknown or unascertainable by the taxpayer, tangible personal property is utilized in the state in which the property was located at the time the rental or royalty payer obtained possession.
(c)

(1) Capital gains and losses from sales of real property located in this state are allocable to this state.
(2) Capital gains and losses from sales of tangible personal property are allocable to this state, if:

(A) The property had a situs in this state at the time of the sale; or
(B) The taxpayer’s commercial domicile is in this state and the taxpayer is not taxable in the state in which the property had a situs.
(3) Capital gains and losses from sales of intangible personal property are allocable to this state, if the taxpayer’s commercial domicile is in this state.
(d) Interest and dividends are allocable to this state, if the taxpayer’s commercial domicile is in this state.
(e)

(1) Patent and copyright royalties are allocable to this state, if and to the extent that the patent or copyright is utilized by the payer in:

(A) This state; or
(B) A state in which the taxpayer is not taxable and the taxpayer’s commercial domicile is in this state.
(2) A patent is utilized in a state to the extent that it is employed in production, fabrication, manufacturing, or other processing in the state or to the extent that a patented product is produced in the state. If the basis of receipts from patent royalties does not permit allocation to states, or if the accounting procedures do not reflect states of utilization, the patent is utilized in the state in which the taxpayer’s commercial domicile is located.
(3) A copyright is utilized in a state to the extent that printing or other publication originates in the state. If the basis of receipts from copyright royalties does not permit allocation to states, or if the accounting procedures do not reflect states of utilization, the copyright is utilized in the state in which the taxpayer’s commercial domicile is located.
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