Business Tax Report

Every business with a Standard Business Tax License is required by the State of Tennessee to file a business tax report. This is a gross receipts tax. Business tax is collected and imposed by the Tennessee Department of Revenue. The tax rate is applied to the gross sales of the business. Effective January 1, 2014, a business must register and pay the tax electronically.

Businesses That Are Liable

Business tax is a privilege tax imposed upon all businesses which sell tangible personal property either wholesale or retail and businesses which render services, except those specifically exempted by law. Generally, all for-profit businesses must pay the local business tax to the Tennessee Department of Revenue which has imposed the tax.

Businesses That Are Exempt

Sales of manufactured goods from a location subject to the ad valorem tax and services furnished by professionals such as doctors, attorneys, accountants, architects, and insurance agents are exempt. Services performed by religious charitable, educational, and non-profit organizations are exempt; however, receipts derived from sales of food, beverages, or other tangible personal property by non-profit entities are subject to the business tax. A few business types may be exempt totally or in part from the business tax because of their liability for certain other privilege taxes. These include soft drink bottlers, gas, electric and water companies, and movie theatres.

Other kinds of businesses which are exempt include:

  1. Businesses with less than $3000 a year in sales.
  2. Operators of camps and trailer parks where only real property is rented.
  3. Farmers selling farm products directly from their farms.

For more information, visit the State of Tennessee's Online Tax Registration website or call the Tennessee Department of Revenue at 800-342-1003.