Tennessee
Taxes and business formation • USA 2025–2026
LLC in Tennessee
Corporation in Tennessee
Tax system of Tennessee
Income Tax
Tennessee has no tax on earned income, which is one of the state's key advantages. Since 2021, even the tax on dividends and interest has been abolished.
Sales Tax
Tennessee's base sales tax rate is 7%. In some areas, local taxes can bring this figure up to 9.75%. Almost all goods and certain services are taxed. We provide services for obtaining a Sales Tax Certificate, and for preparing and filing the Sales and Use Tax Return. We advise business owners on registration, calculation, and reporting.
Property Tax
The average property tax rate in Tennessee is 0.64% of a home's value, which is a moderate figure.
Business Taxes
For corporations in Tennessee, a Corporate Excise Tax of 6.5% on net profit applies. The Franchise Tax is 0.25% of either Net Worth or the Book Value of Real and Tangible Property, whichever is greater. Business Tax on gross receipts: the rate depends on the type of business and ranges from 0.1% to 0.5%, with a minimum of $22.
Excise Taxes
Tennessee levies excise taxes on items such as alcohol, tobacco, and fuel.
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