How to Start an LLC in Tennessee in 2026: Filing Fees, Annual Report and Franchise & Excise Tax

Tennessee has no personal income tax, which draws a lot of founders to form an LLC here. The trade-off is that Tennessee taxes the LLC itself. Forming one costs at least $300, the annual report costs at least the same every year, and almost every LLC registers for franchise and excise tax, with a $100 minimum even in a year with no profit. This guide walks a first-time owner through the filing in order, explains how the per-member fee works, shows what franchise and excise tax means for a small LLC, and ends with a worked first-year budget. Every fee was checked against Secretary of State forms and Department of Revenue guidance in October 2026.

Quick answer

To start an LLC in Tennessee, file articles of organization (Form SS-4270) with the Tennessee Secretary of State through TNCaB and pay $50 per member, with a $300 minimum and $3,000 maximum. Keep a registered agent at a Tennessee street address, file an annual report by the first day of the fourth month after your fiscal year ends, and register for franchise and excise tax with the Department of Revenue.

• One to six members: $300 to file and $300 a year for the annual report

• Franchise tax: 0.25% of net worth, minimum $100

• Excise tax: 6.5% of net earnings

• No personal income tax on wages or business profit

• Local business license from the county and city clerk: $15 each

What a Tennessee LLC is and who should form one

A Tennessee limited liability company is formed under the Tennessee Revised Limited Liability Company Act, Chapter 249 of Title 48. It does what an LLC does everywhere: the company's debts and lawsuits stay with the company, so your house and savings are not exposed just because you own the business. That shield depends on keeping the LLC separate from you, with its own bank account, contracts signed in its name and records of what goes in and out.

The Secretary of State's Division of Business Services keeps the register. Since February 2025 its filings run through TNCaB, the Tennessee Charity and Business filing system, which replaced the older TNBEAR system. You need a TNCaB account to file the articles, file annual reports and order certificates of existence. Older guides and the printed instructions on Form SS-4270 still mention TNBEAR web addresses, so ignore those links.

For federal income tax, a one-member LLC is a disregarded entity and a multi-member LLC is a partnership unless you elect corporate treatment. Tennessee does not follow that for its own business tax: the franchise and excise tax treats most LLCs, including single-member LLCs owned by a person, as separate taxpayers. That is the single biggest difference from neighbouring states and the reason to read the tax section below before you file.

Tennessee LLCs suit contractors, consultants, music and media businesses, online sellers, landlords, restaurants and shops. You do not need to live in Tennessee or be a US citizen to form one, but you do need a registered agent in the state. Licensed professionals such as physicians, lawyers and accountants can choose the professional LLC designation on the same form, with their licensing board's rules on top.

Tennessee LLC at a glance (2026)

$300

Minimum filing fee

$50 per member

$3,000

Maximum filing fee

reached at 60 members

$300

Annual report (minimum)

same per-member scale

$100

Minimum franchise tax

Department of Revenue

How the per-member fee works

Tennessee is one of the few states that price an LLC filing by the number of members. The instructions on Form SS-4270 set the fee at $50 for each member in existence on the filing date, with a floor of $300 and a ceiling of $3,000. Because six members at $50 equal the floor, any LLC with one to six members pays $300. A seventh member adds $50, and the fee stops rising at sixty members.

If you leave the number of members blank on the form, the Secretary of State records one member. Count carefully: understating the number of members to cut the fee leaves an inaccurate public record, and the annual report asks for the count again every year. The articles also carry a flat $300 fee if they state that the LLC is prohibited from doing business in Tennessee, an option used mainly by holding companies that operate elsewhere.

A 2025 bill, SB 37, proposed replacing the per-member scale with flat fees for formation and annual reports. It was withdrawn in January 2025 and never took effect, so the per-member scale still applies. Check the Secretary of State's fee page before you file in case the legislature revisits the idea.

Step 1: Choose a name and a registered agent

The name. Your LLC's name must signal that it is a limited liability company, normally with "LLC", "L.L.C." or "Limited Liability Company", and it must be distinguishable from every other business name on the Secretary of State's records. Search TNCaB before you buy a domain or print signs. If the name you want is close to an existing one, you can apply to use it with the other business's written consent for an extra $20, but that is rarely worth the trouble for a new business. Names containing "bank", "banking", "credit union" or "trust" need written approval from the Department of Financial Institutions first, and "insurance company" needs approval from the Department of Commerce and Insurance.

You can hold a name before filing with an application for name reservation, which costs $20. Tennessee does not use the term DBA. If your LLC trades under a different name, you register an assumed name with the Secretary of State, which is valid for five years and can be renewed. Our DBA guide covers how trade names work across states, and our LLC name checker helps you test options.

The registered agent. Every Tennessee LLC must keep a registered agent and registered office in Tennessee at all times. The agent can be you, another adult with a Tennessee address, or a commercial agent. The office must be a physical Tennessee address that the US Postal Service recognises as deliverable; a post office box, route number or box number alone is rejected. Commercial agents typically charge around $50 to $300 a year, an estimate based on published price lists of national services rather than an official figure.

Step 2: File the articles of organization

The articles of organization, Form SS-4270, create the LLC. The Secretary of State accepts them online through TNCaB, by mail to the Snodgrass Tower in Nashville, or in person. Online filing is the quickest route, and card payments carry a convenience fee. Mailed filings need a check, cashier's check or money order made out to the Tennessee Secretary of State; cash is accepted only at the counter.

The form asks for more than many states' versions, and each item has a reason:

• Name and any additional designation, such as professional LLC, series LLC or nonprofit LLC.
• Registered agent and office, including the county.
• Fiscal year close month. This sets your annual report due date. Leave it blank and the Secretary of State records December.
• Delayed effective date, if you want the LLC to start later, up to 90 days after filing.
• Management: member-managed, manager-managed or director-managed.
• Number of members on the filing date, which sets the fee.
• Principal executive office (no P.O. box) and a business email address. All reminders go by email, so use an inbox someone reads.
• Obligated member entity election, which is optional and covered in the tax section.

Forming a Tennessee LLC in TNCaB

1. 1

   Create a TNCaB account

   Register on the Secretary of State's TNCaB portal. You need the account to file and later to submit annual reports.

2. 2

   Search the name

   Confirm the name is distinguishable and includes an LLC designation.

3. 3

   Complete Form SS-4270 online

   Enter the registered agent, fiscal year close month, management type and the number of members.

   Tip: Pick a fiscal year close month you will remember. It fixes your annual report date for as long as the LLC exists.

4. 4

   Pay the fee

   $50 per member, minimum $300, maximum $3,000, plus the card convenience fee.

5. 5

   Save the filed articles

   Download the stamped filing. Banks, landlords and the Department of Revenue will ask for it.

Why filings get rejected. The Secretary of State's list of common rejection reasons is short and avoidable: the wrong fee, a missing signature or date, an illegible document, no email address, an address the Postal Service cannot verify, or a name that is not distinguishable. Fix the problem named in the rejection notice and resubmit promptly; the LLC does not exist until the articles are accepted.

Step 3: EIN, operating agreement and bank account

EIN. Apply for an employer identification number from the IRS once the articles are accepted. It costs Free ($0), and the online application issues the number at the end of the session. You need it for the bank, for hiring and for the Department of Revenue. Our EIN application guide walks through each screen.

Operating agreement. Tennessee does not ask you to file one, but you should have it in writing. The operating agreement sets how profit is shared, who can sign for the company, how members leave and what happens if a member dies. It also matters for the fee: if new members join, the next annual report counts them. A single-member LLC needs a short agreement too, because banks ask for it and courts look at it when deciding whether the company is genuinely separate from you.

Bank account. Open a business account in the LLC's name with the filed articles, EIN letter and operating agreement. Keep personal spending out of it. Our guide on how to pay yourself from an LLC explains owner draws and salaries.

Beneficial ownership reporting. Since FinCEN's March 2025 interim final rule, companies formed in the United States do not file beneficial ownership information reports, so a new Tennessee LLC has no BOI filing (current position: Not required for US-formed companies).

The annual report and staying in good standing

Every Tennessee LLC files an annual report with the Secretary of State on or before the first day of the fourth month after your fiscal year ends, as T.C.A. § 48-249-1017 requires. With the default December year-end, that means by April 1 every year, starting the year after formation. The report confirms the registered agent, principal office, members or managers and the member count, and it costs the same per-member amount as the articles: $50 per member, minimum $300, maximum $3,000. You file it in TNCaB.

A Tennessee LLC's first 18 months (December year-end)

Formation day

Articles accepted; fee $300 for one to six members

First weeks

EIN, bank account, Department of Revenue registration for franchise and excise tax

Within the year

County and city business licence once receipts pass $3,000

April 1 next year

First annual report due ($300 minimum)

April 15 next year

First franchise and excise tax return due (minimum $100)

The Secretary of State lists four reasons for administrative dissolution: failing to file the annual report, being without a registered agent, a foreign entity losing its assumed name, and a payment returned by the bank. A dissolved LLC can only wind up its affairs, and banks and landlords check good standing. If it happens, file an application for reinstatement, which costs $70, together with every overdue annual report and fee. To change the registered agent, principal address or name between reports, file articles of amendment for $20. When a lender or contract asks for proof of good standing, order a certificate of existence; our certificate of good standing guide explains how these work.

Franchise and excise tax: what Tennessee LLCs actually pay

The Department of Revenue states it plainly: a limited liability company chartered, registered or doing business in Tennessee must register for and pay franchise and excise tax. Register through the Department's online system (TNTAP) soon after formation.

Franchise tax is 0.25% of the LLC's net worth, meaning total assets minus total liabilities from its books. The minimum is $100, owed by every registered LLC even if it had no activity. Since a 2024 law change, the tax is based on net worth alone; the old property-based minimum measure no longer applies for tax years ending on or after January 1, 2024.

Excise tax is 6.5% of the LLC's net earnings for the year. For a single-member LLC owned by a person, that is broadly the business profit you would report on federal Schedule C. Tennessee does not disregard such an LLC the way the IRS does. Only an LLC whose single member is a corporation for federal tax purposes is folded into its owner's return.

Both taxes go on one return, due on the 15th day of the fourth month after your tax year ends, so April 15 for a calendar-year LLC. Once the combined liability reaches $5,000 in both the prior and current year, quarterly estimated payments apply.

Exemptions worth knowing. A family-owned non-corporate entity (FONCE) is exempt if at least 95% of it is owned by relatives and substantially all of its activity is passive investment income, such as residential rents, or farming. That suits many family rental LLCs, but the exemption has to be claimed with the Department of Revenue; it is not automatic. An LLC can also register as an obligated member entity, where members agree to be liable for its debts in return for being taxed differently; giving up the liability shield defeats the purpose of most small LLCs, so take advice first.

No personal income tax. Tennessee repealed the Hall income tax on interest and dividends for tax periods beginning on or after January 1, 2021, and it has never taxed wages. LLC profits you take home are not taxed again by the state. Federal income and self-employment tax still apply, and an S corporation election can reduce self-employment tax once profits are steady; see LLC vs S corp.

Local business licences and sales tax

Business license and business tax. Tennessee's business tax is collected through county and city clerks. A business with gross receipts above $3,000 in a jurisdiction needs a business license there, which costs $15 from each clerk. Once receipts reach $100,000, you hold a standard license and file business tax returns with the Department of Revenue. Our Tennessee business license guide explains classifications, rates and the minimal activity license.

Sales tax. If you sell taxable goods or services, register with the Department of Revenue before your first sale. The state rate is 7%, and local rates bring Nashville and Davidson County to 9.75%. Our Tennessee sales tax guide covers local rates, the single-article cap and filing frequency.

Employees and professional licences. Hiring staff means unemployment insurance registration with the Department of Labor and Workforce Development and, for most employers, workers' compensation insurance. Contractors, cosmetologists and other regulated trades need licences from the Department of Commerce and Insurance. Our guide to hiring your first employee covers the federal side.

What it costs: a worked first-year budget

The table shows three Tennessee LLCs. Secretary of State fees and the $100 minimum franchise tax are official figures. The excise tax lines are worked out at 6.5% of the assumed profit, and the registered agent line is a market estimate.

Reading the table. The excise tax dwarfs the filing fees for a profitable LLC, which surprises owners who chose Tennessee for its lack of income tax. The restaurant's franchise tax rises above $100 once its net worth passes $40,000, since 0.25% of $40,000 is $100. The family rental LLC pays only the filing fee, but it must apply for and keep its FONCE exemption.

Year two onwards. The fixed state cost for a small LLC is the $300 annual report plus at least $100 of franchise tax, so $400 a year before any excise tax. That is far more than an Ohio LLC, which pays no annual state fee, and close to a Massachusetts LLC's $500 report.

Worked examples

A Knoxville marketing consultant. Priya forms a single-member LLC in TNCaB on February 10, 2026, keeps the December year-end and pays $300. She is her own registered agent at her Knoxville office. She registers for franchise and excise tax in TNTAP the same week. Her first annual report, $300, is due by April 1 next year, and her first franchise and excise return by April 15. If she earns $40,000 of profit, the excise tax is $2,600 and the franchise tax is the $100 minimum. She owes no Tennessee income tax on the profit she takes home.

A Nashville restaurant with eight investors. The founders file with eight members, so the articles cost $400 and every annual report costs $400 until the member count changes. They buy county and Metro business licences and register for sales tax at 9.75%. Because they chose a June fiscal year-end to match their lease, their annual report is due by October 1 and their franchise and excise return by October 15.

A Chattanooga family rental company. Three siblings own four rental houses in an LLC. Because relatives own more than 95% and almost all income is residential rent, the LLC claims the FONCE exemption and pays no franchise or excise tax. It still files the $300 annual report every year with the Secretary of State.

Tennessee LLC launch checklist

0/8

• TNCaB account created and name searched
• Registered agent at a Tennessee street address
• Form SS-4270 filed with the correct member count and fiscal year close month
• EIN issued and operating agreement signed
• Franchise and excise tax registration in TNTAP (or FONCE exemption filed)
• County and city business licences once receipts pass $3,000
• Sales tax registration if you sell taxable goods or services
• Annual report and F&E return dates in your calendar

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Common mistakes and how to fix them

Assuming no income tax means no business tax. The excise tax on net earnings works much like an income tax on the LLC. Set aside 6.5% of profit, and check with an accountant whether quarterly estimates apply.

Forgetting the minimum franchise tax on an idle LLC. An LLC that exists on paper but does nothing still owes the $100 minimum and the annual report fee. If you no longer need it, dissolve it properly rather than letting it lapse.

Leaving the fiscal year blank by accident. The default December year-end is fine for most businesses, but if your accountant uses a different year-end, set it on the articles so the annual report and tax return line up.

Using an old TNBEAR link. The printed form instructions still point to TNBEAR. File through TNCaB, and ignore look-alike sites that charge extra to "file with the state".

Not updating the member count. Adding members changes the annual report fee. Report the correct number and amend the records when ownership changes.

Official links

• Tennessee Secretary of State — Business Forms & FeesForm SS-4270, name reservation, amendments, reinstatement
• Form SS-4270 instructions (PDF)$50 per member, $300–$3,000
• TNCaB — online filingForm an LLC, file annual reports
• Department of Revenue — Franchise & Excise TaxRegistration, rates, minimum tax
• Department of Revenue — FONCE exemptionFamily-owned passive entities
• IRS — Apply for an EINFree

What to do next

Test your name with our LLC name checker, then file in TNCaB and get your EIN the same day. Before you open, register for franchise and excise tax, check whether your county and city require a business licence, and add the yearly fixed costs to your plan with the startup cost calculator. If you are still comparing states or structures, our LLC registration guide covers the choices nationally.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How much does it cost to start an LLC in Tennessee?

The Secretary of State charges $50 for each member on the filing date, with a minimum of $300 and a maximum of $3,000. So any LLC with one to six members pays $300. The annual report follows the same scale. Most LLCs also owe at least the $100 minimum franchise tax every year, plus the $15 local business license fee where one applies.

When is the Tennessee LLC annual report due?

It is due on or before the first day of the fourth month after your fiscal year ends. Most LLCs keep the default December year-end, which makes the report due by April 1 each year. The fee is $50 per member with a $300 minimum and a $3,000 maximum. You file it online in TNCaB, the Secretary of State's filing system.

Does a Tennessee LLC pay franchise and excise tax?

Usually, yes. LLCs registered with the Secretary of State or doing business in Tennessee must register for franchise and excise tax. The franchise tax is 0.25% of net worth with a $100 minimum, and the excise tax is 6.5% of net earnings. Unlike most states, Tennessee does not ignore a single-member LLC owned by a person, so it files its own return.

Does Tennessee have a state income tax on LLC profits?

Not on individuals. Tennessee repealed its last personal income tax, the Hall tax on interest and dividends, for tax years beginning on or after January 1, 2021, and it never taxed wages. The state collects business-level taxes instead: franchise and excise tax on the LLC, local business tax on gross receipts, and sales tax on taxable sales.

Can I be my own registered agent in Tennessee?

Yes, if you have a physical Tennessee address where you can accept legal papers. Every Tennessee LLC must keep a registered agent and registered office in the state at all times. A post office box, route number or box number alone is not accepted. Owners outside Tennessee usually hire a commercial registered agent.

How long does it take to form an LLC in Tennessee?

Filing online in TNCaB is the quickest route, because mailed filings add postage time and manual handling; the Secretary of State does not publish a guaranteed turnaround. You can also choose a delayed effective date of up to 90 days after filing, which is useful if you want the LLC to start on January 1. Once the LLC exists, you can get a free EIN online the same day.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Form SS-4270 — Articles of Organization (LLC) and instructions — Tennessee Secretary of State, Division of Business Services · accessed 9 October 2026
2. 2.Business Forms & Fees — Tennessee Secretary of State · accessed 9 October 2026
3. 3.All Frequently Asked Questions for Businesses — Tennessee Secretary of State · accessed 9 October 2026
4. 4.Franchise & Excise Tax overview — Tennessee Department of Revenue · accessed 9 October 2026
5. 5.Franchise & Excise Tax — Due Dates and Tax Rates — Tennessee Department of Revenue · accessed 9 October 2026
6. 6.Family-Owned Non-Corporate Entities (FONCE) — Tennessee Department of Revenue · accessed 9 October 2026
7. 7.Franchise/Excise Tax Basics (taxpayer workshop) — Tennessee Department of Revenue · accessed 9 October 2026
8. 8.Hall Income Tax — Tennessee Department of Revenue · accessed 9 October 2026
9. 9.Tennessee Secretary of State Launches New Filing System — Tennessee Society of CPAs · accessed 9 October 2026
10. 10.TN SB0037 (114th General Assembly) — BillTrack50 · accessed 9 October 2026
11. 11.Get an employer identification number — IRS · accessed 9 October 2026
12. 12.Beneficial Ownership Information — FinCEN · accessed 9 October 2026