Taxpayers with franchise and excise tax liabilities of at least $5,000, after application of all available tax credits, in each of the current and prior tax years must make four estimated payments for the current tax period. For example, if a taxpayer’s franchise and excise tax liability was $6,000 last year, but only $4,000 this year, the taxpayer is not required to file estimated payments for the current or the following tax year.
If the prior tax period was for less than 12 months, the tax liability is annualized. For example, a taxpayer’s franchise and excise tax liability was $6,000 for this year and $2,000 for the prior tax period covering October 1 through December 31. The annualized tax for this short period is $7,940 (365.25 days divided by 92 days multiplied by $2,000). Note that in this example, estimated payments are required because both the prior tax period (annualized) and the current tax year were at least $5,000.
Reference: Tenn. Code Ann. § 67-4-2015(b).