Overview of Tennessee State Tax Requirements
- Tennessee Tax Filing Criteria
- A person whose legal domicile* is in Tennessee and whose taxable interest and dividend income exceeded $1,250 ($2,500 if married filing jointly) during the tax year.
- A person who maintained a Tennessee home for over six months in the tax year, excluding students and military members.
Tennessee Business Tax Requirements
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Income and Filing Criteria
- Rental income from Tennessee properties or operating a Tennessee business requires a state tax return filing, subject to Tennessee income tax.
- Tennessee income tax rate is 0%, but interest and dividends are taxed at 1-2%.
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Business Tax Filing
- If charges billed exceed $100,000 of contracted work performed in a local jurisdiction, a business tax return must be filed.
- Small businesses can claim credits for taxes paid to other states. To avoid excise tax, sales must be under $10,000.
Exemptions and Specifics
- Exemptions
- Certain LLCs, LPs, and LLPs are exempt if over 66% of activities are farming or holding personal residences.
- Generally, only general partnerships and sole proprietorships are exempt from excise tax.
Additional Business Tax Details
- C Corporations and Sales Tax
- C corporations pay Tennessee corporate income tax.
- Once registered, businesses must collect sales tax and file returns online.
Who Must File a TN Tax Return?
- Criteria for Filing
- Individuals must file if they meet the criteria outlined above.
- Rental income from Tennessee properties or operating a Tennessee business also necessitates a state tax return filing.
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