Schedule 170NC/170SF: Consolidated Net Worth Apportionment Schedule (Revision 2023-12)
Tennessee · Tennessee DOR · Used for tax years 2024
These Tennessee schedules calculate the franchise tax apportionment ratio for taxpayers reporting net worth on a consolidated basis. They compare an individual taxpayer’s Tennessee property, payroll, sales, or receipts with the affiliated group’s totals everywhere, and the result
Who files this form
Every taxpayer that belongs to an affiliated group that has elected to compute net worth on a consolidated basis must complete this form.
Use the schedule that applies to you:
- Schedule 170SF: Members of a financial institution affiliated group. This means more than 50% of the group’s aggregate gross income comes from financial institution business, excluding dividends and receipts from transactions between members.
- Schedule 170SC: A manufacturer in a group with a consolidated net worth election that has also elected single sales factor apportionment.
- Schedule 170NC: All other taxpayers covered by the consolidated net worth election.
- Schedule 170NC1: Taxpayers electing to continue triple weighted sales or required to use it under Tennessee Code Annotated, Section 67-4-2111(a). These filers must also complete Schedule 170NC’s property section, lines 1–10.
What you'll need
Have the information needed for your applicable schedule:
- Taxpayer details: Taxable year, taxpayer name, and account number/FEIN.
- Property records for Schedule 170NC: Beginning- and end-of-year original costs for Tennessee property and the affiliated group’s property everywhere, plus inventory, exempt inventory, other tangible assets, and annual rental rates for rented property.
- Partnership information, if applicable: Federal Schedule K-1 for your ownership percentage and the partnership’s balance sheet for its real and tangible personal property. Include this property only if the partnership is not required to file its own franchise and excise tax return.
- Payroll and sales information: The separate entity’s Tennessee compensation and business gross receipts, and the affiliated group’s compensation and business gross receipts everywhere, as required by the schedule.
- Receipts information for Schedule 170SF: Receipts broken out by the categories listed on lines 1–13.
The calculated apportionment ratio is also entered on Schedule F2, line 2.
Common mistakes
- Treating the election as permission to file a consolidated tax return. The consolidated net worth election does not allow this. Each member uses the same consolidated net worth on Schedule F2, line 1, but calculates its own apportionment ratio.
- Using group totals for the Tennessee numerator. Use the individual taxpayer’s Tennessee values in the numerator and the affiliated group’s everywhere values in the denominator.
- Skipping the property section when using Schedule 170NC1. These filers must complete Schedule 170NC, lines 1–10.
- Applying the $30,000,000 finished-goods inventory cap to the whole group. The cap is calculated separately for each entity.
- Assuming a manufacturer’s single sales factor election applies to other group members. It does not. Other members must complete Schedule 170NC’s property and payroll portions and include the manufacturer’s property, payroll, and sales in the denominators.
Questions people ask
Does a consolidated net worth election allow a consolidated tax return?
No. Each member uses the same net worth on Schedule F2, line 1, together with its own separately calculated apportionment ratio.
What is the difference between Schedule 170NC and Schedule 170NC1?
Schedule 170NC weights the sales factor five times. Schedule 170NC1 weights it three times and is for taxpayers electing to continue triple weighted sales or required to use it under the cited Tennessee law.
How is rented property valued?
For Schedule 170NC, line 10, multiply the annual rental rate by eight to determine the year-end value of rented property.
What qualifies as exempt inventory?
Exempt inventory is the amount above $30,000,000 of finished goods located in Tennessee that would otherwise be included in the franchise tax base. The cap applies separately to each entity, not to the affiliated group as a whole.
Where do I enter the final apportionment ratio?
Enter it on the applicable schedule and on Schedule F2, line 2.