Tenn. Code Ann. § 67-4-2004

Section 67-4-2004(2) limits affiliated-group status to the specified more-than-50%-ownership relationships, and subsection (34) defines the relevant persons to include business entities but not natural individuals.

Valenti Mid-South Management, LLC v. Reagan Farr, Commissioner of Revenue, State of Tennessee · filed 2010-11-15(2), (34)

Valenti Management and Valenti Realty are both majority-owned by the same individual, Darrell Valenti, but he does not qualify as a “person” under the Franchise Tax Law. See Tenn. Code Ann. § 67-4-2004(34) (defining “person” or “taxpayer” to include business entities but not natural individuals). Because no domestic person, within the meaning of the Franchise Tax Law, owns more than half of Valenti Management, it cannot utilize subsection (iv) to form an affiliated group.

Section 67-4-2004(14)(A) defines doing business in Tennessee to include purposeful in-state activity undertaken for gain, benefit, or advantage, including entering into a commercial lease.

J-Star Holdings, LLC v. The Pantry, Inc. · filed 2013-01-02(14)(A)

For purposes of the excise tax, “[d]oing business in Tennessee” is defined as “any activity purposefully engaged in within Tennessee, by a person with the object of gain, benefit, or advantage . . . .” Tenn. Code Ann. § 67-4-2004(14)(A). Entering into a commercial lease falls within the definition.

Section 67-4-2004(4) defines business earnings through transactional and functional tests; earnings from property are business earnings when the property’s acquisition, use, management, or disposition is an integral part of the taxpayer’s regular business, and settlement proceeds take the nature of the right compromised.

Emerachem Power, LLC v. Gerregano · filed 2020-06-01(4)

In examining the definition of business earnings under Tennessee Code Annotated section 67-4-2004(4), two tests have been identified. The section of the statute defining “business earnings” as “[e]arnings arising from transactions and activity in the regular course of the taxpayer’s trade or business” has been referred to as the “transactional test,” whereas 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” has been called the “functional test.”

Section 67-4-2004(1) treats gains from property as business earnings under the functional test when the taxpayer’s control of the property materially contributes to producing business earnings.

Blue Bell Creameries, LP v. Roberts · filed 2011-01-24(1)

We hold that Taxpayer’s acquisition and sale of the stock therefore contributed materially to the production of business earnings arising from the sale of Blue Bell ice cream and that Taxpayer’s capital gains thus qualify as business earnings pursuant to the functional test.