RV-F1406701 (12/22) 
 
 Taxable Year                Taxpayer Name                                                                       Account No./FEIN 

 Form IE - Intangible Expense Disclosure 

 This form must be completed if intangible expenses are paid to an affiliate, regardless of whether those expenses are 
 deducted in arriving at the income (loss) subject to excise tax.  File this form with tax return FAE170 or FAE174. 
 
 Part 1 - Intangible Expense Add-Back 

 If such expenses are paid to more than one affiliate, the following information must be provided for each affiliate on 
 separate copies of Form IE. 
 
 Name of Affiliate                                             Affiliate Account Number                           Affiliate FEIN 

 Federal Form Line Number on Which Expense Deducted           Account Title of Expense 

 Part 2 - Intangible Expense Deduction (Enter all that apply) 

 1. Paid, accrued, or incurred to an affiliate registered for and paying Tennessee excise tax........             (1)                               

 2. Paid, accrued, or incurred to an affiliate in a foreign nation that is a signatory to a 
    comprehensive income tax treaty with the United States ............................................................  (2)                        

    Foreign nation                                                                                                

 3. Paid, accrued, or incurred to an affiliate not required to register for or to pay excise tax.......  (3)                                        
    By  entering  an  amount  on  this  line,  you  certify  that  the  affiliate  does  not  have 
    substantial nexus in Tennessee, or is otherwise exempt from Tennessee excise tax. 
    Indicate the applicable exemption or other reason the affiliate is not required to 
    register for or to pay excise tax. 
 
 4. Total intangible expense deduction (add Lines 1 through 3) ................................................. (4)                                

                                  Instructions: Intangible Expense Disclosure 
 When To File Form IE 
 Taxpayers that paid, accrued, or incurred intangible expenses in connection with a transaction with an affiliate, 
 regardless of whether those expenses are deducted in arriving at the income (loss) subject to excise tax, must file Form 
 IE with their franchise and excise tax return (FAE170 or FAE174). If such expenses are paid to more than one affiliate, a 
 separate Form IE should be completed for each affiliate. Form IE must be submitted electronically with the electronic 
 submission of Form FAE170 or FAE174 each year that it applies. 

 Definitions 
 “Intangible expense”   –an expense related to, or in connection with, the acquisition, use, maintenance, management, 
 ownership, sale, exchange, license, or any other disposition of  intangible property, to the extent such amounts 
 are allowed or allowable as deductions or costs in determining federal taxable income on a separate entity basis. 
 “Intangible expense” also means interest expenses directly or indirectly allowed as deductions or costs in determining 
 federal taxable income on a separate entity basis to the extent such interest expenses are directly or indirectly for, 
 related to, or in connection with the direct or indirect acquisition, use, maintenance, management, ownership, sale, 
 exchange, license, or any other disposition of intangible property. 
 
 “Intangible property” – patents, patent applications, trade names, trademarks, service marks, franchise rights, 
 copyrights, licenses, research, formulas, designs, patterns, processes, formats, and similar types of intangible assets. 
 
 “Substantial nexus in this state” –   any direct or indirect connection of the taxpayer to this state such that the taxpayer 
 can be required under the Constitution of the United States to remit the franchise and excise tax. Such connection 
 includes, but is not limited to, the following: 

         (i) The taxpayer    is organized   or commercially     domiciled     in this  state;

         (ii) The taxpayer  owns   or uses   its capital   in this state;

         (iii) The taxpayer has systematic      and continuous       business     activity in this  state    that has produced        gross receipts 
               attributable to customers in this state; 

         (iv) The taxpayer  licenses  intangible    property    for   use by another    party  in   this     state and derives      income from
               that use of intangible property in this state; or 

         (v) The taxpayer   has bright-line    presence    in  this   state. A person  has bright-line         presence     in this   state for a tax 
               period if any of the following applies: 

                 (a) The taxpayer’s total receipts in this state during the tax period, as determined under Tenn. Code 
                     Ann.   § 67-4-2012, exceed     the lesser   of $500,000        or 25% taxpayer’sof the total receipts everywhere 
                     during the tax period; 

                 (b) The average    value   of the taxpayer’s real and tangible  personal      property      owned   or rented        and used 
                     in this state during the     tax period,   as determined     under    Tenn.    Code     Ann.  § 67-4-     2012,  exceeds the 
                     lesser of $50,000 or 25% of the average value of all the taxpayer’s total real and tangible personal 
                     property; or 

                 (c) The total amount paid in this state during the tax period by the taxpayer for compensation, 
                     determined     under   Tenn.  Code       Ann. § 67-4-2012,  exceeds      the   lesser of   $50,000     or 25%    of the total
                     compensation paid by the taxpayer. 
 No company that is treated as a foreign corporation under the Internal Revenue Code and that has no income 
 effectively connected with a United States trade or business shall be considered to have a “substantial nexus in this 
 state.” 
 
 To the extent a company that is treated as a foreign corporation under the Internal Revenue Code has income 
 effectively connected with a United States trade or business, such company's net earnings and net worth for purposes 
 of the franchise and excise taxes shall be its net earnings and net worth connected with its United States trade or 
 business, and only property used in, payroll attributable to, and receipts effectively connected with such company's 

United States trade or business shall be considered for purposes of calculating such company's apportionment 
fraction. Whether a company has income effectively connected with a United States trade or business and the amount 
of its net earnings and net worth connected with its United States trade or business shall be determined in accordance 
with the provisions of the Internal Revenue Code. Tenn. Code Ann. § 67-4-2004(49). 

 Part 1 - Intangible Expense Add-Back 
 Tenn. Code Ann. § 67-4-2006(b)(1)(K) requires that all“intangible expenses” paid to an“affiliated business entity” be 
 added to a taxpayer’s net earnings or losses.  This add-back is reported on Schedule J of the franchise and excise tax 
 return and not on this form. Failure to make this add-back on the initially-filed return will subject the taxpayer to a 
 negligence penalty in accordance with Tenn. Code Ann. § 67-1-804(b)(2). 

 Part 2 - Intangible Expense Deduction 
 Tenn. Code Ann. § 67-4-2006(b)(2)(N) permits intangible expenses to be deducted from the excise tax base in certain 
 circumstances. 

 An intangible expense paid, accrued, or incurred in connection with a transaction with one or more affiliates that has 
 been disclosed on this form may be deducted if (i) the affiliate to whom the expense has been paid, accrued, or incurred 
 is registered for and paying the excise tax, or (ii) the expense was paid, accrued, or incurred to an affiliate in a foreign 
 nation that is a signatory to a comprehensive income tax treaty with the United States or to an affiliate that is otherwise 
 not required to be registered for or to pay the excise tax. 
 
 Enter the applicable amount(s) in the spaces provided for the affiliate listed in Part 1. If an amount is entered on Line 
 2, enter the name of the foreign nation in the space provided. Complete Line 3 if the affiliate is not required to register 
 for or pay the excise tax. This line should only be completed when the affiliate is exempt under the provisions of Tenn. 
 Code Ann. § 67-4-2008 or does not have “substantial nexus in this state” as defined above. 

 Instructions for Deducting Intangible Expenses Reported on This Form 
 To ensure that the deduction is correctly taken, the taxpayer should: 
 •     Complete this form each year it has intangible expenses paid, accrued, or incurred in connection with a 
       transaction with an affiliate 

 •     Add back the intangible expense on FAE170, Schedule J, Line 2 or FAE174, Schedule J, Line 5 

 •     Only include intangible expense deductions on Part 2 that are specifically allowed by statute 

 •     Take the intangible expense deduction computed on Form IE on FAE170, Schedule J, Line 23 or FAE174, 
       Schedule J, Line 27 
 
 Failure To File Form IE 
 The Department will disallow the deduction if a taxpayer deducts intangible expenses paid to an affiliate from net 
 earnings or losses but does not file Form IE with the return. The taxpayer also may be subject to an assessment of 
 excise tax, interest, and penalty, if applicable. The taxpayer may file Form IE with an amended return to claim the 
 deduction. However, if the initially-filed return did not report the intangible expense add-back on Schedule J, Line 2, the 
 taxpayer will be subject to a negligence penalty as set forth in Tenn. Code Ann. § 67-1-804(b)(2).