How is treasury stock treated when computing net worth for franchise tax purposes?
Prior to a 1999 change in the franchise tax law, treasury stock was not included in the computation of net worth for franchise tax purposes. Tenn. Code Ann. Section 67-4-2106(b) computes net worth for franchise tax purposes by deducting total balance sheet liabilities from total balance sheet assets. Although treasury stock is not specifically mention in the statute, the computation of net worth by deducting total liabilities from total assets has the effect of excluding treasury stock from the franchise tax base and results in a computation of same net worth value both before and after the 1999 law change.
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- How is treasury stock treated when computing net worth for franchise tax purposes?
