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Updated: Aug 17, 2022, 3:04pm Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Starting a new business is exciting, but it can also be confusing. Businesses that require a license or a permit must determine if they need it issued from a state, county or federal level. Here’s what you need to know about when and how to get a Tennessee business license. Does Tennessee Require a Business License?Most businesses that sell goods or services are subject to the business tax and must register with the state Department of Revenue to establish an account to pay the taxes. There are also other licenses and permits required for certain types of businesses, including those that sell alcohol to the public, insurance companies, agricultural and food services companies and medical professionals. Each of these licenses or permits is issued by a specific department in the state. If you need more than one license, you’ll need to apply to each department individually. When Do You Need a Business License in Tennessee?The most common business license needed is the business tax license. You will need this license if you sell goods or services in the state of Tennessee. This includes those businesses headquartered outside of the state that sells to those within the state, even via mail order. If you are located within a specific Tennessee city, you may also need to pay city business taxes as well. The threshold for needing a business tax license is $3,000 in gross annual receipts. If you have between $3,000 and $10,000 in gross annual receipts, you may qualify for a minimal activity license. Any business with more than $10,000 in receipts must obtain a standard business license. Types of Business LicensesJust about every business in the state will need to get a business tax license. Once you have this license, you’ll need to determine if you need to get a city tax license as well as any of the other types of licenses that Tennessee requires. Other types of licenses and permits include:
Steps to Getting Your Tennessee Business LicenseThe licensing process requires that you file an online application found at the Tennessee Department of Revenue’s Tennessee Taxpayer Access Point (TNTAP). The process will require you to enter your business’s name, address and contact number. It will also ask for the owner’s contact information. You will be asked to provide a copy of the owner’s driver’s license and an electronic signature is captured at the end. Once the application is completed and submitted, you need to pay a $15 fee to the county or municipal clerk where your business is located. It can take up to ten business days to process the application and register the business. How Much Does a Business License Cost in Tennessee?Most municipalities charge $15 for a business license. Nashville is considered an Urban Services District (USD) and charges a $30 fee for registration. Other license fees will depend on the type of permit or license required. Liquor license fees depend on the size of the venue and range from $650 to $1,200. Food permits are issued by the county and start at around $30. Check with your county to determine the actual cost of licenses and permits needed for your business. Bottom LineEvery business in Tennessee should check with the Department of Revenue and local municipalities to determine what, if any, licenses and permits are required to conduct business. If you have at least $3,000 in gross receipts, you’ll definitely need a business tax license at the very least. Frequently Asked Questions (FAQs)Does Tennessee require a business license?Tennessee requires a standard business license for businesses that have at least $10,000 in gross annual receipts. A minimal activity license is required for businesses with between $3,000 and $10,000 in receipts. Your business license must be posted in your business location. Who is exempt from Tennessee business tax?There are certain business organizations that are exempt from paying Tennessee business tax. The list of exempt businesses includes religious or charitable entities, movie theaters, manufacturers and direct-to-home satellite providers.
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Something went wrong. Please try again later. Do I have to register my sole proprietorship in TN?You don't have to register your Sole Proprietorship with the Tennessee Secretary of State. It simply exists once you decide to start a business and engage in business activities. However, you may need municipal business licenses and may be able to file a DBA for your Sole Proprietorship at the county clerk's office.
How much is a sole proprietorship license in Tennessee?Once the application is completed and submitted, you need to pay a $15 fee to the county or municipal clerk where your business is located.
Do sole proprietors pay business tax in Tennessee?Sole Proprietorships
Income from your business will be distributed to you as the sole proprietor, and you will pay federal tax on that income. However, because Tennessee has no personal income tax, you will not owe tax to the state on your business's income.
Who is exempt from a business license in TN?Businesses with less than $10,000 in taxable sales sourced to a county are exempt from the state business tax in that county, and businesses with less than $10,000 in taxable sales sourced to a municipality are exempt from the municipality business tax in that municipality.
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Does a sole proprietor need a business license in tennessee
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