TCA § 67-4-2023 — Election for application of section by taxpayer meeting gross sales threshold and receipts factor threshold — Total amount derived from certified distribution sales to be excluded from numerator of receipts factor — Payment of excise tax on amount excluded from numerator

Notwithstanding any law to the contrary, a taxpayer that meets the gross sales threshold and the receipts factor threshold during the tax period qualifies for the application of this section and may elect the application of this section by filing an election form with the department and providing such information as may be required by the commissioner on or before the due date of the tax return for the period for which such election is to take effect. Such election shall remain in effect until revoked by the taxpayer or until the taxpayer no longer qualifies for the election. For purposes of this section, the following shall apply: A taxpayer meets the gross sales threshold if the taxpayer's sales of tangible personal property made in this state during the tax period to all distributors exceed one billion dollars ($1,000,000,000), as determined under § 67-4-2012 without regard to this section; A taxpayer meets the receipts factor threshold if the taxpayer's receipts factor, as determined under § 67-4-2012 without regard to this section, exceeds ten percent (10%); and “Certified distribution sales” means sales of tangible personal property made in this state by the taxpayer to any distributor, whether or not affiliated with the taxpayer, that is resold for ultimate use or consumption outside the state; provided, that the distributor has certified that such property has been resold for ultimate use or consumption outside this state. Such certification shall be made in the manner prescribed by the commissioner. A taxpayer that has made the election described in subsection (a) shall, so long as such election is in effect, apportion net earnings and net worth in the manner prescribed elsewhere in this part and the Franchise Tax Law, compiled in part 21 of this chapter; provided, however, that the total amount derived from certified distribution sales shall be excluded from the numerator of the receipts factor, as that term is defined elsewhere in this part and the Franchise Tax Law. A taxpayer that has made the election described in subsection (a) shall, so long as such election is in effect, pay to the commissioner, annually, an excise tax on the total amount of certified distribution sales excluded from the numerator of the taxpayer's receipts factor. The amount of such tax shall be computed in the following manner: In the case of taxpayers excluding no more than two billion dollars ($2,000,000,000) of certified distribution sales for the tax period, the amount of such tax shall be five-tenths of one percent (0.5%) of the total amount of certified distribution sales; In the case of taxpayers excluding more than two billion dollars ($2,000,000,000) but no more than three billion dollars ($3,000,000,000) of certified distribution sales for the tax period, the amount of such tax shall be: Three-eighths of one percent (0.375%) of certified distribution sales in excess of two billion dollars ($2,000,000,000); plus Ten million dollars ($10,000,000); In the case of taxpayers excluding more than three billion dollars ($3,000,000,000) but no more than four billion dollars ($4,000,000,000) of certified distribution sales for the tax period, the amount of such tax shall be: One-fourth of one percent (0.25%) of certified distribution sales in excess of three billion dollars ($3,000,000,000); plus Thirteen million, seven hundred fifty thousand dollars ($13,750,000); and In the case of taxpayers excluding more than four billion dollars ($4,000,000,000) of certified distribution sales for the tax period, the amount of such tax shall be: One-eighth of one percent (0.125%) of certified distribution sales in excess of four billion dollars ($4,000,000,000); plus Sixteen million, two hundred fifty thousand dollars ($16,250,000). The tax due under subdivision (c)(2) shall be in addition to all other taxes, including the tax imposed by § 67-4-2007(a).