By Jeremy Wright

If you are located in Tennessee and are subject to the business tax you must obtain a Business License. You are not allowed to operate until the license is obtained and posted in the business location.

If you have an in-state location with sales of more than $3,000, you must obtain either a minimal activity license or a standard business license from your county and/or municipal clerk. You must pay an initial $15 fee for each license obtained from your county clerk and if applicable your city official.

Minimal License: If your taxable sales at any given location are more than $3,000 but less than $10,000, you are required to obtain a minimal activity license from the county, and if applicable, the city of your location.

Standard License: If your taxable sales at any given location are $10,000 or more, you must obtain a standard business license from your county clerk before conducting business. If you anticipate your taxable sales will be over $10,000, we advise you to go ahead and obtain the Standard License.

The state administered business tax is based upon business gross receipts. The business tax return is due annually by the 15th day of the fourth month after your fiscal year ends.

Service Business Exemption

State law exempts gross receipts from services provided by medical, dental, legal, and educational providers and certain services provided by nonprofit membership organizations. Services by religious and charitable organizations and veterinary services are also exempt from business tax.

If you have questions about a specific business activity, please contact the Department of Revenue at (615) 253-0600 (Nashville-area and out-of-state) or (800) 342-1003 (statewide toll-free). If you are an out-of-state entity doing business in Tennessee without a fixed business location in Tennessee, please contact the Department to discuss your situation to determine if Tennessee business tax is required to be paid.

Manufacturers Exemption

In order for a business to qualify as an exempt manufacturer at a particular location for business tax purposes, it must meet all of the following requirements:

• The business must be engaged in one of the activities described under Division D of the Standard Industrial Classification index at the location.
• Over 50% of the business’s gross receipts at that location must be derived from manufacturing.
• Sales of the manufactured products must be made from the manufacturing location.

If the business qualifies as an exempt manufacturer, all of its gross sales at that location are exempt from the business tax. Under these circumstances, the business will not register the location or get a business tax license for the location.

Acquiring a Business License

The business representative must visit the local County and City for each business location to obtain a Business License and pay the initial fee; some counties and cities may have an online applications.

Register with TNTAP

Upon receipt of your “Account Number Issued” letter from the TDOR, the business must register their account online via the Tennessee Taxpayer Access Point (TNTAP) for online filings and payments.

Links
TDOR website – Business Tax
TN Business Tax Guide
TNTAP