Annual Filing Requirements for Tennessee LLCs

Learn about the annual report and tax filing obligations for Tennessee limited liability companies.

To establish and operate a Tennessee limited liability corporation (LLC), you must prepare and submit a number of paperwork with the state. This article discusses Tennessee LLCs’ most essential continuing reporting and state tax filing obligations.

Report Annual

The state of Tennessee requires you to produce an annual report for your limited liability company. You may submit the report by mail or online at the Secretary of State’s website. From the SOS website, you may obtain an annual report form that already includes crucial information for your LLC. You’ll need to give some basic information to complete the annual report, such as:

The names and addresses of your LLC’s primary and postal addresses, the name and address of your LLC’s registered agent, the names and addresses of LLC managers (if any), and a few other basic facts.

The annual report is required on the first day of the fourth month after the fiscal year end of the LLC. If your LLC’s fiscal year ends on June 30, for example, your annual report is due by October 1. The report is due by April 1 if your fiscal year is the calendar year. The filing cost is $50 per member, with a $300 minimum and a $3,000 maximum.

State Corporation Tax

Most LLCs are pass-through tax corporations when it comes to income taxes. In other words, the burden for paying federal income taxes is passed via the LLC to the individual LLC members. LLCs do not pay federal income taxes by default; only its members do.

Most LLCs in Tennessee, however, are subject to a franchise tax and an excise tax. This tax must be registered with the Department of Revenue (DOR). You may register in person at a DOR site or via mail. The franchise tax is assessed as a tiny proportion of an entity’s net wealth, while the excise tax is calculated as a percentage of net profits from Tennessee firm.

In certain situations, the owners of an LLC elect to have their firm taxed as if it were a corporation. This decision is made by submitting IRS Form 2553 to the IRS. (The form is available on the IRS website.) Tennessee’s franchise and excise taxes apply to LLCs that are taxed as corporations as well.

Employer Taxes in the State

Do you have workers in your LLC? If this is the case, you must pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not addressed in this section. (However, it is important to understand that federal employer tax duties begin with getting a federal employer identification number (EIN).) However, Tennessee employers may be required to pay state taxes as well.

You will very certainly need to register to pay state unemployment insurance (UI) taxes. Tennessee’s Department of Labor and Workforce Development is in charge of these taxes (LWD). Form LB-0441 may be used to register for these taxes. Then, each quarter, complete Forms LB-0456 and LB-0851 to record wages and pay UI taxes.

Taxes on Sales and Use

If your LLC sells items to Tennessee clients, you must collect and remit sales tax. This implies you’ll have to register with the Department of Revenue for this reason and then make periodic sales tax payments for products sold. You may register online or on paper using the DOR form (Application for Registration). You will be issued a sales tax permit after you have registered. Then, on a regular basis (say, quarterly), you must file sales tax reports with the DOR. Use Form SLS 450 to pay sales tax or submit online. Visit the DOR website for additional information.

Other States Registration

If you want to do business in states other than Tennessee, your LLC may need to be registered in any or all of those states. The exact states concerned will determine if you are needed to register: each state has its own regulations for what defines conducting business and whether registration is required. For registration reasons, having a physical presence (a business location) in a state, recruiting personnel in a state, or soliciting business in a state (through telephone, print advertisements, mail, or the Internet) are sometimes considered conducting business. Obtaining a certificate of authority or comparable document is normally required for registration.