If you Start a Business in Tennessee, you’ll most likely need to pay state business taxes through the Tennessee Department of Revenue. Here’s what to know:
What is a Tennessee seller’s permit?
A state-issued seller’s permit is generally required of businesses that conduct sales in a particular state—in Tennessee, this “permit” is simply called sales tax registration. While all business-tax-paying entities have to register through the Department of Revenue’s Tennessee Taxpayer Access Point (TNTAP), some businesses will also have to register with their county and/or municipality. Local registrations will depend on the location and scope of your business.
State tax registration is free in Tennessee.
Do I need to pay business tax in Tennessee?
Chances are: yes. Both domestic and out-of-state businesses that have substantial nexus in the state must register with the Tennessee Department of Revenue and pay Tennessee Business Tax. “Nexus,” as defined by the TN Business Tax Manual (p. 21), includes businesses that engage in the following activities in Tennessee:
- Employ people
- Use third parties to conduct substantial business
- Maintain inventory
- Participate in promotional activities with company personnel
- Employ subsidiaries
- Use company-owned trucks or contract-carriers
- Maintain a place of business
- Lease or rent personal property
- Repair, install or assemble personal property
- Provide telecommunication services to subscribers in Tennessee
- Provide any taxable service
- Use an in-state party to route customers to an out-of-state dealer
While Tennessee businesses with a Certificate of Resale may not need to pay taxes on some re-sold goods, this is the exception—not the rule. It’s best to check with a CPA to make sure your business is exempt before you decide to forgo sales tax in Tennessee.
How do I report my sales tax in Tennessee?
After registering your business with the Department of Revenue, you will have to file an annual State and Local Sales and Use Tax Return. (Tax returns and payment should be submitted online via TNTAP.) You can find state documents for tax returns, exemptions, and other forms on the Department of Revenue’s Sales and Use Tax Forms page.
Do I need a business license in Tennessee?
According to the Tennessee Department of Revenue, all new businesses must obtain a business license from the county and/or municipal clerk in the jurisdiction where their business is located. Business licenses generally cost $15, but may be more expensive in certain urban areas. In Davidson County, for example, businesses pay the standard $15 for a business license, unless they’re located within Nashville city limits—then the cost is $30.
Does my TN business need other licenses or permits?
Depending on the type of business you conduct or the service you provide, you may be required to obtain professional licenses or permits (see more on TN’s Licenses & Permits page). If you’re unsure whether your business requires a state, local, or industry-issued license, you can visit Tennessee’s “Regulations” page and Search for a License by Profession, License Name or Topic.
If you’re still uncertain as to the permits and/or licenses your business might need in Tennessee, it’s best to reach out to a CPA for guidance specific to your business.