The property factor is based on the real and tangible personal property owned or rented and used during the tax period. Because computer software is not tangible personal property for franchise and excise tax purposes, it should not be included in the property factor on Schedules N or 170NC. Even though capitalized software may be reported as a long-lived asset and amortized, it is nonetheless not tangible personal property for franchise and excise tax purposes and should be omitted from Schedules N and 170NC.
Reference: Tenn. Code Ann. § 67-4-2111(b).
Comments