Form Fae 170 - Franchise, Excise Tax Return Page 5
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8TENNESSEE DEPARTMENT OF REVENUE
ALLOCATION AND APPORTIONMENT SCHEDULES
SCHEDULES M THROUGH R
(FORM FAE 170)
TAXABLE YEAR
ACCOUNT NO./FEIN/SSN
TAXPAYER NAME
IMPORTANT: IF YOU USE THIS FORM, ATTACH IT TO YOUR FRANCHISE, EXCISE TAX RETURN.
Allocation and apportionment schedules may be used only by taxpayers doing business outside the state of Tennessee within the meaning of Tenn. Code Ann.
Sections 67-4-2010 and 67-4-2110. The burden is upon the taxpayer to show that the taxpayer has the right to apportion.
SCHEDULE M - Schedule of Nonbusiness Earnings
Note - If all earnings are business earnings as defined below, do not complete this schedule. Any nonbusiness earnings, less related expenses, are subject to
direct allocation and should be reported in this schedule.
Definitions: “Business Earnings” means ( 1 ) earnings arising from transactions and activity in the regular course of the taxpayer’s trade or business or (2)
earnings from tangible and intangible property if the acquisition, use, management, or disposition of the property constitutes an integral part of
the taxpayer’s regular trade or business operations. In essence, earnings which arise from the conduct of the trade or trades or business operations
of a taxpayer are business earnings, and the taxpayer must show by clear and cogent evidence that particular earnings are classifiable as nonbusiness
earnings. A taxpayer may have more than one regular trade or business in determining whether income is business earnings.
“Nonbusiness Earnings” means all earnings other than business earnings.
Description
Gross
*Less Related
Net
Net Amounts
(If further description is necessary see below)
Amounts
Expenses
Amounts
Allocated
Directly to Tenn.
1. _______________________________________________________________________________________________________________
2. _______________________________________________________________________________________________________________
3. _______________________________________________________________________________________________________________
4. _______________________________________________________________________________________________________________
5. _______________________________________________________________________________________________________________
6. _______________________________________________________________________________________________________________
7. _______________________________________________________________________________________________________________
8. _______________________________________________________________________________________________________________
Total nonbusiness earnings (Transfer to Schedule J, Line 24)
XXXXX
Nonbusiness earnings allocated directly (Transfer to Schedule J, Line 31)
XXXXX
9. _______________________________________________________________________________________________________________
If necessary, describe source of nonbusiness earnings and explain why such earnings do not constitute business earnings as defined above. Enumerate these items
to correspond with items listed above.
*As a general rule, the allowable deductions for expenses of a taxpayer are related to both business and nonbusiness earnings. Such items as administrative costs,
taxes, insurance, repairs, maintenance, and depreciation are to be considered. In the absence of evidence to the contrary, it is assumed that the expenses related
to nonbusiness rental earnings will be an amount equal to 50 percent of such earnings and that expenses related to other nonbusiness earnings will be an amount
equal to 5 percent of such earnings. (See regulation 1320-6-1.23(3))
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