Tennessee LLC Taxes & Fees 2026: Complete Guide
Quick Answer
Tennessee LLCs pay $300 for formation and $300 for annual reports (due April 1). While TN has no state income tax on wages, LLCs are subject to franchise tax ($0.25 per $100 of TN property/net worth, $100 minimum) and excise tax (6.5% on net earnings). These business taxes make Tennessee more complex than states with no entity-level taxes.
Key Takeaways
- $300 LLC formation fee
- $300 annual report due April 1 each year
- No state income tax on wages/salaries
- Franchise tax: $0.25 per $100 of TN property or net worth (minimum $100)
- Excise tax: 6.5% on net earnings from TN operations
- Late annual report penalty: $50/month up to $1,500 max
| Item | Cost/Details | Notes |
|---|---|---|
| LLC Formation | $300 | One-time filing fee |
| Annual Report | $300 | Due April 1 each year |
| Late Penalty | $50/month | Max $1,500 |
| Franchise Tax (minimum) | $100 | Even if no TN property |
| Excise Tax | 6.5% | On net earnings |
| Foreign LLC Registration | $300 | For out-of-state LLCs |
Tennessee LLC Formation Costs
Forming an LLC in Tennessee costs $300 for the Articles of Organization filing. This is higher than many states but includes processing within 2-4 business days.
Additional Formation Costs
- Registered agent service: $50-$300/year (or free if you're your own agent)
- Operating agreement: Free (DIY) to $150-$500 (attorney prepared)
- EIN: Free from IRS
- Business licenses: Varies by city and business type
Cost Comparison: Tennessee's $300 formation fee is higher than Indiana ($95), North Carolina ($125), or Ohio ($99).
Annual Report Requirements
Tennessee LLCs must file an annual report with the Secretary of State each year.
Key Details
- Fee: $300
- Due date: April 1 each year
- Late penalty: $50 per month (maximum $1,500)
- Filing method: Online through TN Secretary of State website
Late Penalty Calculation
| Months Late | Penalty | Total Due |
|---|---|---|
| 1 | $50 | $350 |
| 6 | $300 | $600 |
| 12 | $600 | $900 |
| 30+ | $1,500 (max) | $1,800 |
Tennessee Franchise Tax
Tennessee franchise tax applies to LLCs doing business in the state. It's calculated based on your Tennessee property or net worth.
How It's Calculated
Franchise tax = $0.25 per $100 of the greater of:
- Tennessee property (real + tangible personal property)
- Net worth apportioned to Tennessee
Minimum Tax
The minimum franchise tax is $100, even if your calculations would result in a lower amount. Most small LLCs with minimal property or net worth pay only the $100 minimum.
Examples
| TN Property/Net Worth | Franchise Tax |
|---|---|
| $0 - $40,000 | $100 (minimum) |
| $100,000 | $250 |
| $500,000 | $1,250 |
| $1,000,000 | $2,500 |
Tennessee Excise Tax
Tennessee excise tax is 6.5% on net earnings from Tennessee business operations. This is similar to a corporate income tax.
How It Works
- Calculated on your LLC's net income from Tennessee operations
- Multi-state businesses apportion income based on TN activity
- Losses can be carried forward to offset future income
- Filed with the same return as franchise tax
Examples
| Net Earnings | Excise Tax (6.5%) |
|---|---|
| $0 | $0 |
| $50,000 | $3,250 |
| $100,000 | $6,500 |
| $250,000 | $16,250 |
Note: The excise tax is in addition to franchise tax. You may owe franchise tax even if you have no excise tax due (and vice versa).
How to File Tennessee Business Taxes
Combined Franchise & Excise Tax Return
Franchise and excise taxes are filed together using the Tennessee Franchise & Excise Tax Return.
- Form: FAE170 (or FAE174 for single-member LLCs)
- Due date: 15th day of the 4th month after your fiscal year ends
- Calendar year filers: Due April 15
- Filing method: Online through Tennessee Taxpayer Access Point (TNTAP)
Must File Even If No Tax Due
Tennessee requires you to file franchise and excise tax returns even if you owe nothing. Failure to file can result in penalties.
Total Annual Cost Estimate
Here's what a typical Tennessee LLC costs annually:
| Item | Typical Cost |
|---|---|
| Annual Report | $300 |
| Franchise Tax (minimum) | $100 |
| Excise Tax (varies) | $0+ |
| Registered Agent (if using service) | $50-$150 |
| Minimum Annual Total | $400+ |
Comparison: Tennessee's minimum $400/year cost ($300 annual report + $100 franchise tax) is higher than many states. Consider Indiana ($16/year) or North Carolina ($200/year) if lower ongoing costs are a priority.
Frequently Asked Questions
Does Tennessee have state income tax for LLCs?
What is Tennessee franchise tax?
What is Tennessee excise tax?
When is the Tennessee LLC annual report due?
Do I need to file franchise and excise tax even if I have no income?
Official Source
For the most up-to-date information, always verify requirements with the official Tennessee Secretary of State website:
https://sos.tn.gov/business-servicesImportant Disclaimer
This article is for informational purposes only and does not constitute legal advice. LLC requirements, fees, and deadlines change frequently. Always verify current requirements with your state's Secretary of State office before making business decisions.
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