Business Tax Return - Instructions - Classification 4 printable pdf download

BUSINESS TAX RETURN - INSTRUCTIONS

Classification 4

NOTE: A taxpayer with a location within the limits of a Tennessee city that has enacted the business tax must file two business tax returns for

that location - one return for the city and one return for the county. These returns must be filed with the Tennessee Department of Revenue.

A taxpayer with a location outside the limits of any Tennessee city, or inside the limits of a city that has not enacted the business tax, must file

one business tax return for that location for the county. The return must be filed with the Tennessee Department of Revenue.

Classification 4 contractors are liable for the business tax in each county and city in which the taxpayer receives $50,000 or more in contracts

during the business tax reporting period. When a Classification 4 contractor meets or exceeds the $50,000 threshold in a county or city in

which the contractor’s business is not domiciled, the contractor must, at that time, contact the county clerk or designated city business tax

official to obtain a business license and register for business tax in that county and city.

When filing a business tax return in a jurisdiction that is not the contractor’s jurisdiction of domicile but in which $50,000 or more

in contracts were received during the period covered by the return, mark the return as a “Final Return” unless certain that the

contractor will have $50,000 or more in contracts in the jurisdiction during the next business tax year. If the contractor has filed a

final return for the jurisdiction but reaches $50,000 in contracts in the jurisdiction during the next business tax year, the contractor

will need to obtain a new business license in that jurisdiction.

Classification 4 contractors will pay business tax on gross receipts for the county and city jurisdictions in which the taxpayer’s business is

domiciled on gross receipts derived from all locations less any amounts reported for business tax purposes for counties and/or cities in which

the taxpayer’s contracts totaled or exceeded $50,000 during the taxable period.

TAXPAYER IDENTIFICATION: Ensure that the return contains the correct name and address, business tax account number, Federal

Employer Identification Number/Social Security Number/Taxpayer Identification Number issued by the IRS, business class, and business

license number for the reporting entity. If using a blank return downloaded from the Department of Revenue’s web site, the taxpayer

must ensure that the taxpayer has entered all required items of information in the fields at the top of the return.

Line 1:

Enter the gross sales total for the reporting period. Do not report amounts of sales tax collected. Do not report amounts of liquor-

by-the-drink tax collected. Do include commissions received for sales of lottery tickets.

Line 2:

Enter the total amount for all deductions allowed from Schedule A, Line 18 on back of the return form.

Line 3:

Calculate the taxable gross sales for the tax period by subtracting Line 2 from Line 1.

Line 4:

Compute the amount of business tax due. Multiply the amount reported on Line 3 by the class rate indicated on the return. If the tax

rate is not preprinted on the return, refer to the tax rate chart on the second page of the return.

Line 5:

Enter the amount of personal property taxes that can be taken as a deduction for the reporting period. The amount reported

cannot exceed more than 50% of the tax amount reported on Line 4. The tax must be paid prior to or during the reporting period

for which this return is filed and must be paid in the jurisdiction for which this return is filed. Real property taxes may not be

deducted.

Line 6:

Calculate the total business tax due by subtracting Line 5 from Line 4. Enter that amount or $22, whichever is greater, here. The

amount reported cannot be less than 50% of the amount of business tax reported on Line 4 or $22, whichever is greater.

Line 7:

If your account has a credit balance from an overpayment on a prior return, enter the amount on this line.

If the return is filed and or payment is made after the due date reflected on the return, compute the amount of penalty due for the

Line 8:

number of days delinquent. Subtract Line 7 from Line 6 and compute penalty as follows: 1 - 30 days = 5%; 31 - 60 days = 10%; 61

- 90 days = 15%; 91 - 120 days = 20%; 121 days and over = 25%. The maximum penalty amount is 25%. The minimum penalty

amount is $15.

Line 9:

Calculate the interest due. Multiply the amount of tax due and reported on Line 6 less Line 7 by the number of days delinquent.

Multiply that result by the current interest rate. Divide that result by 365.25. Enter here.

Line 10:

Add Lines 6, 8, and 9. Subtract Line 7. Enter here. This is the amount due with the return. Make payment payable to the

Tennessee Department of Revenue.

Schedule A: Deductions for Business Tax Purposes

Line 1:

Enter the gross sales of services that were substantially performed in states other than Tennessee.

Line 2:

Enter the proceeds from sales of goods, wares, or merchandise returned by the customer when the sales price was refunded either

in cash or by credit. This amount should equal the amounts reported on Schedule A, Line E on all Tennessee Sales and Use Tax

Returns due from the taxpayer during the business tax reporting period.

Business Tax Return - Instructions - Classification 4

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