Tennessee LLC Taxes (2026)
Understand Tennessee LLC taxes in 2026, including federal classification, state tax registration, sales tax, payroll accounts, recurring fees, and local obligations.
LLC Route Editorial Team
Reviewed against official state and federal resources.
Updated July 28, 2026
Educational guide, not legal or tax advice.
Tennessee LLC taxes are separate from the $300 minimum formation fee and the $300 minimum annual report. The actual obligations depend on federal classification, net worth, net earnings, taxable sales, gross receipts, employees, and location.
Educational note: This guide is for general informational purposes only. It is not legal, tax, accounting, or financial advice. Confirm current requirements with IRS, Tennessee Department of Revenue, local agencies, and qualified professionals.
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| Tax or filing | What to know |
|---|---|
| Federal income tax | Depends on the LLC’s IRS classification |
| Franchise tax | Based on net worth; minimum generally $100 |
| Excise tax | Generally 6.5% of Tennessee net earnings |
| Sales and use tax | Generally 7% state rate plus local tax |
| Business tax | Based on business classification and receipts |
| Business license | $15 license fee when required |
| Employer accounts | Withholding, unemployment, and workers’ compensation |
| Annual report | $300 minimum; $50 per member |
Federal tax treatment
By default, a single-member LLC is often disregarded for federal income tax purposes and a multi-member LLC is often taxed as a partnership. An eligible LLC can elect corporate tax treatment. That choice affects federal returns, owner reporting, payroll, and estimated taxes.
Franchise and excise tax
Tennessee says corporations, LLCs, and other covered entities chartered, qualified, registered, or doing business in Tennessee must register for and pay franchise and excise taxes unless an exemption applies. Franchise tax is based on net worth and has a $100 minimum. Excise tax is generally 6.5% of net earnings from Tennessee business.
Sales and business tax
The general Tennessee sales-tax rate is 7%, with local tax added. Sales and use tax registration is separate from LLC formation and has no registration fee through TNTAP.
Business tax is separate from sales tax. A business with more than $3,000 in taxable receipts generally needs a business license. At $100,000 or more in receipts, standard business-tax registration and filing rules generally apply.
Employer filings
When hiring, review Tennessee withholding, unemployment insurance, new-hire reporting, wage reporting, and workers’ compensation requirements. The EIN is only the federal identifier.
Keep the filings separate
- LLC formation: creates the Tennessee LLC
- Annual report: $300 minimum, member-based Secretary of State filing
- Franchise tax: net-worth-based Department of Revenue obligation
- Excise tax: net-earnings-based tax
- Sales-tax account: registration for covered taxable sales or services
- Business tax and license: receipt and location-based requirements
- Employer accounts: withholding, unemployment, and related obligations
Tax FAQ
Does every Tennessee LLC pay the same tax?
No. The amount depends on tax classification, net worth, earnings, receipts, sales, employees, and location.
Does formation register franchise and excise tax?
No. Tennessee tax registration and returns are separate.
Is the annual report the same as franchise tax?
No. The annual report is filed with the Secretary of State. Franchise and excise tax is filed with the Department of Revenue.
Is an EIN free?
Yes. EINs are free when requested directly from the IRS.
Official resources
- Tennessee franchise and excise tax
- Tennessee excise tax guidance
- Tennessee sales-tax rates
- Tennessee business license overview
- IRS LLC federal tax classification
- IRS EIN application
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