Gross receipts are generally sourced to the state where goods are delivered or shipped to a purchaser. If the taxpayer is not subject to tax in the purchaser’s state, those sales are not “thrown back” and counted as Tennessee sales in the receipts factor of the apportionment ratio for franchise and excise tax purposes. For example, a Tennessee business delivers goods to a customer in a state that does not have an income tax. The sale would be included in the denominator of the Tennessee receipts factor, but not the numerator.
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