The business tax is imposed generally on anyone delivering goods or services to Tennessee customers. You’ll need to register your business with the state Department of Revenue to establish an account to pay the taxes. There are also other licenses and permits required for certain types of businesses.
When Do You Need a Business License?
The most common business license needed is the business tax license. Most businesses that sell goods or services are subject to the business tax and must register with the state Department of Revenue.
To legally operate your business in Tennessee, you must register it with the Tennessee Secretary of State or the appropriate state agency. The registration process and fees may vary depending on your business structure and location.
Registration Steps and Requirements
To successfully register your business in Tennessee, it’s crucial to familiarize yourself with these steps. First, choose your business structure. The optimal framework for your company in Tennessee depends on your business characteristics and aspirations for expansion. Next, perform a business name search and register your chosen name. Then, check Tennessee zoning regulations, as business locations are almost always regulated.
From registering a business to seeking funding and applying for grants, this guide has everything you need to start a business in Tennessee. It covers all the information you need to know, from picking the right idea to preparing for a launch.
Almost every business operating in Tennessee must register for the Tennessee Business Tax. You will need your EIN Number to complete this registration.
If you decide to use a “doing business as” (DBA) name, our DBA guide will help ensure you are properly registered on a state, county, and/or city level. There are benefits to registering your assumed name with the state. It offers protection against other Tennessee businesses, proves your company’s legitimacy, and may be required by some vendors, banks, and lenders.
Do sole proprietors pay business tax in Tennessee? Tennessee’s excise tax effectively is an income tax. It is a flat 6.5% tax on net earnings from doing business in the state. Generally speaking, only general partnerships and sole proprietorships are exempt.
How much does it cost to register a sole proprietorship in Tennessee? Contact the county clerk for the county where your principal place of business is located. The license should cost around $15.
In Tennessee, sole proprietors and partnerships can use their full, legal name(s) as their business name.
Starting a business in Tennessee requires consideration of several vital aspects. You’ll need to come up with a unique name, obtain funding, establish a legal business entity, and more.
Essential Tips for Running a Business in Tennessee
- Name your business.
- Register with the State.
- Check Tennessee zoning regulations.
You must find licenses and permits your business requires to operate in Tennessee. There is no single generic business license that ensures compliance with all requirements.
Tennessee has no personal income tax. Your business income won’t be taxed by the state. Overall Tennessee has a competitive tax burden.
Exemptions and Additional Considerations
Who is exempt from a business license in Tennessee? Businesses with under $10,000 in taxable sales are exempt from taxes.
Tennessee law requires employers to determine if liable for unemployment insurance tax. If so, they must file quarterly reports.
If your business is from another state, it’s a "foreign business." You must register in Tennessee to operate legally.
Considering starting a new business in Tennessee? It’s an excellent state for business. Need help getting started? Here’s a guide covering all you need to know—from picking the idea to preparing to launch. → Download Now: Starting a Business Workbook. Let’s dive in.