2021 Tennessee Code
Title 67 - Taxes and Licenses
Chapter 4 - Privilege and Excise Taxes
Part 20 - Excise Tax Law of 1999
§ 67-4-2020. Taxes Collected From Loan and Related Companies

This section does not create or impose a new tax, but shall govern allocation of taxes already collected under this part from financial institutions, including loan or trust companies regulated by the department of financial institutions, which do not have deposit facilities. These taxes shall be allocated as follows:

1. To cities and counties, an amount for each institution with a branch in this state and each “financial institution unitary business” as defined in this section:
   
   
   1. Three percent (3%) of the net earnings of the institution and the net earnings of a financial institution unitary business determined on a combined basis for the second fiscal year preceding the year in which the distribution under this section is made, less seven percent (7%) of the ad valorem taxes paid by the financial institution or financial institution unitary business on its real and tangible personal property for the second fiscal year preceding the year in which the distribution is made. For purposes of this subdivision (1), “net earnings” does not include amounts attributable to interest earned on bonds and other obligations of this state. As used in this section, “financial institution unitary business” includes only those financial institutions that form a unitary business as defined in § 67-4-2004, that file a combined franchise, excise tax return in this state and that have at least one (1) member with a branch in this state. The total amount thus determined shall be allocated between the county and municipal governments where the office of the financial institution or financial institution unitary business is located in the same proportion as the property tax rate of each such taxing jurisdiction shall bear to the sum of the property tax rates;
   
   
   2. In circumstances where a financial institution or financial institution unitary business has more than one (1) branch or office, the total allocation attributable to such financial institution or financial institution unitary business as determined in subdivision (1)(A) shall be further allocated between such counties and cities where its branches or offices are located as follows:
      1. The proportionate percentage that is produced by the ratio of outstanding loans and sales contracts receivable in each branch or office of the financial institution or financial institution unitary business to the total outstanding loans and sales contracts receivable of the financial institution or financial institution unitary business shall be determined as of January 1 for each year, and the percentage so determined shall then be applied to the total allocation to determine the portion of the total attributable to each branch or office;
      
      
      2. The branches or offices shall then be grouped each to a common location so as to determine the aggregate allocation of all branches or offices located in each individual county and municipality; and
      
      
      3. The percentage of the total allocation allowable to each county and municipality shall be divided between the county and municipality where the branch or office is maintained in the same proportion as the property tax rates of each for the second year preceding the year in which the distribution under this section is made shall bear to the total of the property tax rates.
   
   
   3. The director of the division of property assessments shall provide to the commissioner, periodically on a timely basis, the ad valorem property tax rates for each taxing jurisdiction. The commissioner shall report the amount of such allocations made to each county and municipality to the comptroller of the treasury for audit purposes on an annual basis.
   
   
   4. The status of each financial institution or financial institution unitary business as of January 1 of the fiscal year for which the allocation is calculated shall be the determining basis.
   
   
   5. If the net earnings of any financial institution or financial institution unitary business shall be redetermined for any period in accordance with this part, the commissioner shall recalculate the allocation attributable to such financial institution or financial institution unitary business, and any indicated increase or decrease in allocation shall be effected in the next succeeding general allocation to the respective county and municipal governments, as appropriate.
   
   
   6. The commissioner has the authority and power to prescribe forms upon which all financial institutions or financial institution unitary businesses shall report such facts and information as will enable the department to ascertain the correctness of the allocation. The department has the full power to summon witnesses, to inspect or require the production of books and papers, and to obtain and consider any evidence and records other than the reports submitted by such financial institutions or financial institution unitary businesses that it may deem proper or necessary to carry out its responsibilities under this section. If any financial institution or financial institution unitary business subject to this part fails, refuses or neglects to collect and file such form with the department as provided by this section, the department shall determine the amount of the allocation in regard to such institution on the basis of the best information available.


2. After allocation to counties and municipalities as provided in subdivision (1), the remainder of the taxes collected under this part shall be applied to and become a part of the general fund of the state.