Modern Market Telecommunications Providers Privilege Tax
The modern market telecommunications providers privilege tax was implemented as part of the changes included in Public Chapter 490 (2017). This public chapter discontinued the Ad Valorem Tax Reduction Fund and redistributed the sales and use tax collected from interstate or international telecommunications services sold to businesses. It also reduced the ad valorem tax rate to be paid on all operating property used by modern market telecommunications providers to the rate applicable to commercial and industrial property.
The modern market telecommunications providers privilege tax is based on the taxpayer’s pro rata share of the total assessed value of all operating property used by modern market telecommunications providers in Tennessee during tax year 2017. This percentage is calculated by the Office of State Assessed Properties and is given to the taxpayer prior to the first due date.
The privilege tax includes a state and local tax amount. The tax is calculated by multiplying the taxpayer’s 2017 pro rata share percentage by:
|$4,000,000 for 2018||$750,000 for 2018|
|$3,000,000 for 2019||$750,000 for 2019|
|$2,000,000 for 2020||$750,000 for 2020|
|$1,000,000 for 2021||$500,000 for 2021|
|$0 for 2022||$500,000 for 2022|
The privilege tax is due each year on or before April 20. It is effective through 2022. No tax will be due for 2023 or any subsequent years.