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)

Terms Used In Tennessee Code 67-4-2020

  • Commissioner: means the commissioner of revenue. See Tennessee Code 67-4-2004
  • Department: means the department of revenue. See Tennessee Code 67-4-2004
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Financial institution: means a holding company, any regulated financial corporation, a subsidiary of a holding company or a regulated financial corporation, an investment entity that is indirectly more than fifty percent (50%) owned by a holding company or a regulated financial corporation, or any other person that is carrying on the business of a financial institution. See Tennessee Code 67-4-2004
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
  • 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
  • Taxing jurisdiction: means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico or a territory or possession of the United States. See Tennessee Code 67-4-2004
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(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.
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