Tax Manuals

The information provided in the Department’s tax manuals is general in nature. The opinions expressed in the manuals are informal and do not constitute a revenue or letter ruling pursuant to the provisions of Tennessee Code Annotated § 67-1-109. Future amendments, court decisions, regulation changes, or other factors could change the opinions expressed in the manuals.

The Department updates its tax manuals in February and August of each year to clarify existing guidance, provide additional guidance, or address law changes resulting from new legislation or litigation. In order to provide guidance in the interim periods, the Department will regularly update this section with information that will be included in upcoming manuals. And like the guidance contained in the manuals, the information contained in this section constitutes “published guidance,” as defined in Tenn. Code Ann. § 67-1-108.

Franchise and Excise Tax Manual

Excise Tax Update – Foreign Derived Intangible Income (FDII)

Page 300 of the Franchise and Excise Tax Manual indicates that Tennessee has decoupled from the federal provision (I.R.C. § 250) that allows a deduction for FDII. The Department has reviewed this issue and determined that while Tennessee has decoupled from I.R.C. § 250 for purposes of global intangible low-taxed income (GILTI), it has not decoupled for purposes of the FDII deduction. Therefore, in computing “net earnings” under Tenn. Code Ann. § 67-4-2006, taxpayers are entitled to the full amount of the I.R.C. § 250(a) deduction to which it is entitled under federal law as it relates to FDII.

Date published: January 26, 2023

 

Click here for an overview of current updates to the Department of Revenue's tax manuals.  Updates are predominately based on changes in Tennessee law pursuant to the 2021 legislative session, as well as opportunities for improved clarity or expanded guidance.  

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