1320-06-01-.29
Property Factor: Averaging Property Values
Cite as Tenn. Comp. R. & Regs. 1320-06-01-.29
(1)
As a general rule the average value of property owned by the taxpayer shall be determined
by averaging the values at the beginning and ending of the tax period. However, the
Commissioner of Revenue may require or allow averaging by monthly values if such method
of averaging is required to properly reflect the average value of the taxpayer’s property for
the tax period.
(2)
Averaging by monthly values will generally be applied if substantial fluctuations in the values
of the property exist during the tax period or where property is acquired after the beginning of
the tax period or disposed of before the end of the tax period.
Example: The monthly value of the taxpayer’s property was as follows:
January .................................................................................………………
$2,000
February ...............................................................................………………
2,000
March ...................................................................................………………
3,000
April .....................................................................................………………
3,500
May ......................................................................................………………
4,500
June ......................................................................................………………
10,000
$25,000
FRANCHISE AND EXCISE TAX RULES AND REGULATIONS
CHAPTER 1320-06-01
July ......................................................................................………………
15,000
August ..................................................................................……………..
17,000
September..............................................................................…………….
23,000
October..................................................................................…………….
25,500
November..............................................................................…………….
13,000
December .............................................................................…………….
2,000
$95,000
TOTAL $120,000
The average value of the taxpayer’s property includable in the property factor for the income
year is determined as follows:
$120,000 ÷ 12 = $10,000
(3)
Averaging with respect to rented property is achieved automatically by the method of
determining the net annual rental rate of such property as set forth in Rule 1320-06-01-.28
(b).