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Tennessee Franchise Tax and Excise Tax


Content provided for general information. Talk to your advisor to learn about recent updates or other rules that may apply to your situation.

Tennessee franchise and excise taxes apply to corporations, LLCs, limited partnerships, and business trusts registered in or operating in Tennessee.

What is the TN franchise tax?

A franchise tax is a tax for having the right to do business in Tennessee. Unlike other taxes, a business does not need to have a profit or sales to owe a franchise tax.

The franchise tax rate is 0.25% times the greater of a business’s net worth or real and tangible property. The minimum tax is $100. There is no maximum.

What is the TN excise tax?

The excise tax is like an income tax. Even though Tennessee doesn’t have a personal income tax, businesses have to pay an excise tax.

The excise tax rate is 6.5% of a business’s Tennessee taxable income. The tax does not apply to a business’s income that’s attributable to other states.

The excise tax is in addition to sales tax.

Who do the franchise and excise taxes apply to?

The following businesses generally need to pay franchise tax and excise tax:

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