Tennessee LLC Tax: Understanding the State’s Tax Requirements for LLCs

One of the concerns you may have when forming a limited liability corporation (LLC) in Tennessee is if the state levies an LLC tax. The good news is that LLCs are not subject to a state-level tax in Tennessee. But Tennessee LLCs must still be conscious of certain tax regulations, just as in any other state.

The state franchise tax is one of the most significant taxes that LLCs in Tennessee are required to pay. This tax is determined yearly depending on the assets of the LLC and is owed. The minimum franchise tax is $100, and the rate is $0.25 for every $100 of taxable property. Every year on April 15th, the tax is payable.

Tennessee LLCs should be mindful of the state’s sales tax as well. You must apply for a sales tax permit with the Tennessee Department of Revenue if your LLC offers products or services in Tennessee. Although there are several exemptions and unique tax rates for particular kinds of sales, the state’s sales tax rate is 7%.

Although it is not necessary, it is typically not advised to utilize a PO Box as your LLC’s registered office in Tennessee. The state mandates that LLCs’ registered agents have a physical street address. For this purpose, a PO Box is not regarded as a legitimate address. Additionally, it could be more challenging to establish your LLC’s authenticity and credibility with clients and business associates if you use a PO Box as your company address.

Legal and tax paperwork must be delivered to a registered agent on behalf of an LLC. Being a registered agent entails a number of dangers, including the danger of facing a personal lawsuit if the LLC breaks state rules or laws, the danger of being held accountable for any harm the LLC causes, and the danger of losing privacy because personal information will be made public.

Using LegalZoom to create an LLC can be convenient and economical, but there are some possible downsides. One of the biggest issues is that LegalZoom’s forms and templates are not tailored to the rules and regulations of particular states. This could lead to mistakes or omissions that later on might be problematic. Furthermore, you might not get the same level of support and customer service from LegalZoom as you would from a neighborhood lawyer or business formation agency. Who may serve as a registered agent?

A person of Tennessee, a domestic corporation, or a foreign corporation with permission to conduct business there can all serve as a registered agent in Tennessee. The registered agent must accept legal and tax paperwork on behalf of the LLC and be accessible during regular business hours. The registered agent must have a physical street address in Tennessee. It’s crucial to select a registered agent that is dependable, trustworthy, and skilled in the creation and administration of LLCs.