Tennessee Business Compliance Checklist
Tennessee has no state income tax but a Franchise & Excise Tax that hits nearly every business. This page covers everything from filing fees to sales tax to hiring laws.
$300
$300
Every year
7%
state base rate
Yes
1. Entity Formation
| LLC filing fee (Articles of Organization) | $300 |
| Corp filing fee (Articles of Incorporation) | $100 |
| Registered agent required | Yes — must have a physical address in the state |
| Publication requirement | No |
| Processing time | ~7 business days (expedited available for extra fee) |
2. Annual Maintenance
| Annual/periodic report | Every year — fee $300 |
| Franchise tax | Franchise & excise tax: 0.25% of net worth + 6.5% of net earnings. |
3. Sales Tax
| State base rate | 7% |
| Combined rate range (with local) | 7% – 9.75% |
| Economic nexus (out-of-state seller) | $100,000 per year |
| Marketplace facilitator law | Yes — marketplaces (Amazon, Etsy) collect on your behalf. |
Need to check nexus across multiple states? Use our Sales Tax Nexus Checker.
4. Employer Requirements
| Minimum wage | $7.25/hr (2025) |
| Paid sick leave law | None (federal only) |
| Non-compete enforceability | Enforceable — reasonable scope and duration required |
| Contractor classification test | Common-law (IRS) test |
Full employment law breakdown: Tennessee Hiring Laws.
5. Workers' Compensation
Tennessee allows private-market workers' comp insurance (competitive market). Coverage is required starting with your 5th employee.
Estimate your premium with our Workers' Comp Calculator.
6. State Income Tax
Tennessee has no state individual income tax. This applies to pass-through business income (sole prop, LLC, S-Corp).
Compliance by Business Structure
Pick your structure to see structure-specific compliance items.
What Makes Tennessee Distinctive
Compliance quirks and rules that separate Tennessee from other states — worth understanding before you file.
- Tennessee charges $300 for LLC formation and $300 for the annual report — among the higher combined LLC costs.
- Tennessee Franchise & Excise Tax applies to LLCs and corporations: 0.25% of net worth (franchise) + 6.5% of net earnings (excise) with a $100 minimum.
- Tennessee Business Tax is a separate gross receipts-style tax on classified business activities.
This is a reference, not legal advice.
State fees and rules change. Verify current values with the Tennessee Secretary of State, Department of Revenue, and Department of Labor before filing. For complex situations, consult a licensed CPA or attorney.