Taxpayers that are self-insurers of workman’s compensation pay a gross premiums tax to the Department of Commerce and Insurance at a rate of four percent on the premium that they would have paid if they carried the full coverage insurance called for with a licensed insurance company. These taxpayers may take the four percent paid either as a credit against their franchise, excise tax or as a deduction in arriving at their net income (loss) subject to the excise tax. Any credit claimed on FAE170 Schedule D must be reported as an add-back on Schedule J. The related 0.4% surcharge may not be included in this credit.
Reference: Tenn. Code Ann. §§ 67-4-2009(1); 67-4-2109(c).