Corporations, LLCs, partnerships, and business trusts that are formed in Tennessee or do business in the state are required to pay franchise and excise taxes. These are the main taxes that the state charges businesses to operate in the state.
The Tennessee franchise tax is a small percentage of the total value of the business or the value of the tangible property that is owned or used in the state – whichever is greater. The minimum amount due is $100.
The Tennessee excise tax is a percentage of taxable income.
Businesses are required to file a franchise and excise tax return even if they had no activity during the year. They will still be liable for the minimum amount of $100.
Net operating losses in previous years can be used to offset net income. There are certain limitations and the losses are only allowed to be carried forward for a finite number of years.
All businesses are required to file Tennessee franchise and excise taxes and make payments online. The requirement to file online became effective on January 1, 2014. You can visit the Tennessee DOR for more information on the franchise and excise tax.