Overview of Taxes in Tennessee
Businesses in Tennessee are subject to franchise tax, excise tax, business tax, and sales tax. Certain small businesses may be exempt. Register through the Department of Revenue.
Tennessee Business Taxes
- Sole proprietors and partnerships are exempt from business tax.
- LLCs, corporations, and limited partnerships pay franchise and excise taxes.
- Franchise tax rate: 0.25% of net worth or property, with a minimum tax of $100.
- Excise tax rate: 6.5% of taxable income.
Exemptions from Business Tax in Tennessee
- Businesses under $10,000 in taxable sales are exempt from business tax in specific areas.
- Certain non-corporate entities meeting specified criteria are also exempt.
Business Tax Filing and Requirements
- Businesses must file returns and pay taxes electronically through TNTAP.
- TNTAP account IDs consist of 10 digits.
Sales Tax and Exemptions
- The Tennessee sales tax rate is 7%, with local taxes added in some areas.
- Sales tax exemptions vary by item.
Importance of Filing Taxes
Filing taxes is crucial for small businesses to maintain financial health and compliance with regulations, helping to save time, money, and avoid legal issues.