BUSINESS LICENSE/TAX OVERVIEW
Generally, if you conduct business within any county and/or incorporated municipality in Tennessee, then you should register for a business license and remit business tax. Business tax consists of two separate taxes: the state business tax and the city business tax.
With a few exceptions, all businesses that sell goods or services must pay the state business tax. This includes businesses with a physical location in the state as well as out-of-state businesses performing certain activities in the state.
It may take up to 10 business days for the Department of Revenue to register your business. You are not allowed to operate until your required license is obtained and posted in your business’ location.
For in-state businesses: If your in-state location has gross receipts of more than $3,000 but less than $10,000 annually, you must obtain a minimal activity license from your county and/or city clerk. A standard business license is needed from your county and/or city clerk if your gross receipts are $10,000 or more in a year.
For out-of-state businesses that are not contractors: If you are an out-of-state business with substantial nexus to Tennessee and engaged in this state for business tax purposes, you must register with the department and remit business tax on any gross receipts from sales of $10,000 or more annually in any county in Tennessee.
Out-of-state contractors: Please click here to visit Revenue Help for more information.
If you are subject to the business tax, you must register to pay the tax after obtaining your county business license. This application can be submitted electronically using the Tennessee Taxpayer Access Point (TNTAP).
OBTAINING A BUSINESS LICENSE
You must obtain a business license before engaging in business in the State of Tennessee. Licenses are obtained from the County Clerk (and City Clerk if located within city limits) where the business is located. Each license is $15.00
Business Name and Location
You must decide under what name your business license will be issued and where it will be located.
- Building structures of brick and mortar will have a physical location address.
- For Online businesses your location address will be the physical place where your records are maintained.
- For either business format the location address can NOT be a post office box or private mail box service address.
Type of Business License Needed
- No business license: $0 – $2,999 in annual gross sales.
- Minimal Activity License: $3,000 – $10,000 in annual gross sales. This license is $15 annually and can be renewed through the local county clerk’s office.
- A Minimal Activity License does not require a business tax account or tax return to be filed.
- You may be required to have a Sales and Use Tax account if you average more than $400 in sales per month.
- A new Minimal Activity License must be issued and the $15 fee paid annually.
- Minimal Activity Licenses all expire each year on May 15th .
- Standard Business License: $10,001 and over in annual gross sales. The first/initial standard business license is obtained through the County Clerk’s office at the $15 fee.
- A Standard Business License DOES require a tax account and tax return to be filed.
- Subsequent renewals and business taxes are remitted electronically to the Department of Revenue through the TNTAP online service.
- Standard Business Licenses are not renewable by the County Clerk’s Office.
NOTE: A standard business license may be obtained by request for any business regardless of gross sales.
Sales and Use Tax Account Number
Any person who sells, leases, or rents tangible personal property or provides a taxable service is required to register for sales and use tax purposes, even if the product sold is exempt from tax.
Businesses that average more than $400 a month in sales of tangible personal property and businesses averaging more than $100 per month in sales of taxable services must register for sales and use tax purposes.
- Taxpayers may register for a sales and use tax account online through the Tennessee Taxpayer Access Point (TNTAP).
- There is no charge for registering a business for a sales and use tax account.
- When a taxpayer has registered, the Department of Revenue will send a Certificate of Registration to be displayed at the business location.
- Retailers, wholesalers, and manufacturers will also receive a Tennessee Certificate of Resale.
To register a new business, taxpayers should select the link Register a New Business on the TNTAP home page.
FISCAL YEAR AND TAX DUE DATE
The state administered business tax is a tax based upon business gross receipts, which is due annually. Your business tax due date is the 15th day of the fourth month after your fiscal year ends (Example: Fiscal Year January 1st thru December 31st, due date April 15th).
- All classifications will be filed based on the business taxpayer’s fiscal year. The fiscal year is consistent with Internal Revenue Service or Tennessee State Franchise & Excise Tax deadlines..
- New licenses issued will expire 30 days after the “due date” for the upcoming tax period.
- By law, all Standard Business License holders must create a TNTAP account with the Department of Revenue, prior to filing a Business tax return electronically. It is critical that you do this as soon as possible and do not wait until the due date of your return, as this could delay processing.
Additionally, if you have a business location in a city that has enacted the business tax, then you are required to pay the city business tax as well. Click here for a comprehensive list of cities that have enacted business tax. Note that if your business location is not included on the list, it does not necessarily mean you are not subject to the city business tax. There are many areas in Tennessee that are governed by and part of an adjoining incorporated city.
REGISTER YOUR BUSINESS IN TNTAP
The Tennessee Taxpayer Access Point (TNTAP) website is where you register, file, pay and maintain your tax accounts with the Department of Revenue.
Use the informational links below the help you in registering your tax accounts with Revenue in TNTAP
CLOSING A BUSINESS
If you decide to close your business, you must file a final business tax return with the Department of Revenue within 15 days of closing and pay any tax that is due (minimum of $22). Failure to notify Department of Revenue of business closure could result in assessment of your business for delinquent taxes, penalty, and interest after your business has ceased operations. You should also notify your county and/or city clerk that the business has closed.
Businesses holding minimal activity licenses that do not file tax returns should notify local city and county officials or the Department of Revenue that the business is closed.
What You Need to Do to Close Your Business:
- If a business has been issued a license or permit, these must be surrendered and will be revoked by the Department of Revenue.
- If a taxpayer/business has posted a bond of any type against your tax account, the bond must remain posted until all outstanding liabilities are settled.
- A business that has a resale certificate and is closing must notify its suppliers in writing that its certificate is no longer valid.
- All closures require that businesses file final tax returns and remit taxes for which they are registered.
Most account closures can be handled through TNTAP, or by calling Department of Revenue at (615) 253-0600.
ADDITIONAL RESOURCES AND CONTACT INFO
Business tax should be filed and paid online using the Tennessee Taxpayer Access Point (TNTAP). A TNTAP logon should be created to file this tax. Click here for help creating your logon.
For up to date information, changes and assistance with determining the new due date, please visit the Department of Revenue’s website.
For assistance by phone, please call 1-800-342-1003 (toll free) or (615) 253-0600.
Email inquiries should be forwarded to: email@example.com.
How to obtain
Contact the IRS at 800-829-1040 or online at: www.irs.gov
Contact the Tennessee Department of Revenue online at: www.tennessee.gov/revenue/. Or you may call a Sales Tax office at one of these numbers:
Knoxville Sales Tax Office: 865-594-6100
Nahsville Sales Tax Office: 615-253-0600 Option 2
Contact the Secretary of State at 615-741-3276.
- Small Business Information
Contact Tennessee Small Business Development Center (TSBDC) at www.tsbdc.org.