Rules & Regulations of the State of Tennessee
Title 1320 - Revenue
Subtitle 1320-06 - Franchise and Excise Tax Division
Chapter 1320-06-01 - Franchise and Excise Tax Rules and Regulations
Section 1320-06-01-.29 - PROPERTY FACTOR: AVERAGING PROPERTY VALUES
Current through September 24, 2024
(1) As a general rule the average value of property owned by the taxpayer shall be determined by averaging the values at the beginning and ending of the tax period. However, the Commissioner of Revenue may require or allow averaging by monthly values if such method of averaging is required to properly reflect the average value of the taxpayer's property for the tax period.
(2) Averaging by monthly values will generally be applied if substantial fluctuations in the values of the property exist during the tax period or where property is acquired after the beginning of the tax period or disposed of before the end of the tax period.
Example: The monthly value of the taxpayer's property was as follows:
|
January ................................................................................. ...... |
$2,000 |
|
February ............................................................................... ...... |
2,000 |
|
March ................................................................................... ...... |
3,000 |
|
April ..................................................................................... ...... |
3,500 |
|
May ...................................................................................... ...... |
4,500 |
|
June ...................................................................................... ...... |
10,000 |
|
$25,000 |
|
|
July ...................................................................................... ...... |
15,000 |
|
August .................................................................................. ....... |
17,000 |
|
September .............................................................................. ...... |
23,000 |
|
October .................................................................................. ...... |
25,500 |
|
November .............................................................................. ...... |
13,000 |
|
December ............................................................................. ...... |
2,000 |
|
$95,000 |
|
|
TOTAL |
$120,000 |
The average value of the taxpayer's property includable in the property factor for the income year is determined as follows:
$120,000 ÷ 12 = $10,000
(3) Averaging with respect to rented property is achieved automatically by the method of determining the net annual rental rate of such property as set forth in Rule 1320-06-01-.28 (b).
Authority: T.C.A. §§ 67-101(2), 67-1-102, and 67-4-2012.
