Some businesses will have state tax requirements in addition to federal requirements.

Business Tax

All businesses that sell goods or services have to pay Tennessee business tax depending on gross receipts for the year. This also includes out of state business with a location in TN and out of state businesses that sell services delivered to TN, lease items in TN, or makes sales as a natural gas marketer to customers in TN.

The first step will be to register for a business license in your county and possibly city as well.

  • For businesses with gross sales of $100,000 or more: Standard Business License
  • For businesses with more than $3,000 but less than $100,000 in gross sales: Minimum Activity License.
  • Businesses with less than $3,000 in gross sales do not have to obtain a license.

If you have a Standard Business License, you’ll also need to register your business with the TN department of Revenue. Each year you’ll file a Business Tax Return and pay business tax through the department’s taxpayer access site, TNTAP. Business Tax Return and payment are due by April 15th each year, and no extensions are allowed.

The following are exempt from business tax: Employees, manufacturers, religious and charitable entities selling donated items, direct-to-home satellite providers, and movie theaters.

Franchise/Excise Tax

All corporations, limited partnerships, LLCs, and business trusts that are chartered, qualified, or registered in TN or doing business in the state must file a Franchise/Excise Tax Return and pay Franchise/Excise tax of a minimum $100 each year. This can be filed and paid on TNTAP. Some companies may be eligible to file an exemption. The Return must be filed and tax paid by April 15th each year. Timely filed extensions are allowed for time to file the Return. The tax is still due on or before April 15th.

The tax is based on two factors.

  • Franchise tax: The greater of your net worth or the book value of real or tangible personal property owned or used in TN.
  • Excise Tax: Based on net earnings or income for the year.

Secretary of State Filing

Any corporation, limited partnership, limited liability company or business trust chartered/organized in Tennessee or doing business in this state must register with the secretary of state and file annual reports. An annual report must be filed by April 1st and filing fee must be paid. The fee will depend on the business structure.