Bass, Berry & Sims attorney Steve Jasper commented on the June 2019 notice by the Tennessee Department of Revenue (DOR) classifying subpart F income as a dividend for excise tax purposes. Bass, Berry & Sims attorney Steve Jasper commented on the June 2019 notice by the Tennessee Department of Revenue (DOR) classifying subpart F income as a dividend for excise tax purposes. As the DOR explained in the notice, taxpayers can deduct this income like any other dividend if the taxpayer “receives such income from a controlled foreign corporation in which it owns 80 percent or more of the outstanding capital stock.”

According to Steve, the “ruling specifies that a taxpayer must ‘directly own’ the stock in the corporation to claim the deduction.” However “there has been some dispute from taxpayers and practitioners,” Steve added.

The full article, “DOR Treats Subpart F Income as a Dividend,” was published by State Tax Notes on July 22, 2019, and is available online (subscription required).