The Complete Guide to Tennessee Business Licenses
Tennessee licenses most businesses through its business tax. The license is issued by your county clerk — and by the city, if your city imposes the business tax — and which license you need depends on your gross receipts. This guide explains each step for a new Tennessee business.
Step 1: Form the LLC
File Articles of Organization with the Tennessee Secretary of State. The fee is $50 per member, with a $300 minimum and $3,000 maximum, and the annual report costs the same. Tennessee LLCs also generally owe the franchise tax (0.25% of net worth, $100 minimum) and excise tax (6.5% of net earnings). See the Tennessee LLC guide for every formation step.
Step 2: Get the right business license
Tennessee's Department of Revenue sets three tiers based on taxable gross receipts:
- Under $3,000: no license required (you may buy a $15 minimal activity license if you want one).
- $3,000 to under $100,000: a minimal activity license, renewed every year for $15 from the county clerk and/or city clerk. No business tax return is filed.
- $100,000 or more: a standard business license for $15, plus registration with the Department of Revenue, an annual business tax return and at least the $22 minimum business tax. The license renews automatically when you file and pay.
Step 3: Sales and use tax
If you sell taxable goods or services, register with the Tennessee Department of Revenue for sales and use tax before your first sale. The state rate is 7%, plus local rates. Use your registration on resale certificates — see our resale certificate guide.
Step 4: Professional and contractor licenses
The Department of Commerce and Insurance licenses contractors, home improvement contractors, cosmetologists, real estate professionals and many other occupations; health professions are licensed by the Department of Health. Local zoning, occupancy and health permits also apply.
Hiring staff
Tennessee has no state income tax on wages, so there is no state withholding account — but employers register with the Department of Labor and Workforce Development for unemployment insurance.
Checklist
| Registration | Agency | Cost |
|---|---|---|
| Articles of Organization | Secretary of State | $50 per member ($300 min, $3,000 max); same for annual report |
| Minimal activity license ($3,000–$100,000) | County and/or city clerk | $15 a year |
| Standard business license ($100,000+) | County and/or city clerk + Department of Revenue | $15 + business tax (min $22) |
| Sales and use tax registration | Department of Revenue | Before your first taxable sale |
| Franchise and excise tax | Department of Revenue | 0.25% of net worth (min $100) + 6.5% of earnings |
Frequently Asked Questions
Does Tennessee require a business license?
Yes, for most businesses. If your gross receipts are $3,000 or more you need either a $15 minimal activity license (under $100,000) or a $15 standard business license with business tax returns ($100,000 or more), from the county and/or city clerk.
How much is a business license in Tennessee?
The license fee is $15. Businesses with $100,000 or more in receipts also file a business tax return and pay at least the $22 minimum business tax.
Where do I get a Tennessee business license?
From your county clerk, and from the city official too if your city imposes the business tax.
How much does it cost to form an LLC in Tennessee?
The fee is $50 per member, with a $300 minimum and a $3,000 maximum. The annual report costs the same, and most LLCs also owe franchise and excise tax.
Does a Tennessee LLC need a business license?
Usually yes. Forming the LLC registers the company, and once gross receipts reach $3,000 the LLC needs a minimal activity or standard business license.