For purposes of the franchise and excise tax, how should taxpayers in the telecom industry source their receipts from other-than-tangible-personal-property sales?

For tax years beginning July 1, 2016, taxpayers who:

• primarily sell telecommunications, mobile telecommunications, internet access, video programming, or direct-to-home satellite television programming services, and
• are members of an affiliated group of taxpayers that has incurred more than $150,000,000 in aggregate qualified expenditures or has made sales in excess of $150,000,000 that are subject to Tennessee sales and use tax

should source their receipts from other-than-tangible-property sales to Tennessee by averaging two sourcing methods: 1) cost of performance based on the earnings producing activity and 2) market based sourcing.  They should report Tennessee and everywhere receipts for tangible and other-than-tangible sales on Schedule N-Apportionment. They should also maintain detailed records to support their calculations.