For tax years beginning on or after 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:
- Cost of performance based on the earnings producing activity
- Market based sourcing.
These taxpayers should report Tennessee and everywhere receipts for tangible and other-than-tangible sales on Schedule N-Apportionment and maintain detailed records to support their calculations.
Reference: Tenn. Code Ann. §§ 67-4-2012(j); 67-4-2111(j).