How to Start an LLC in Tennessee (2026 Guide)
Tennessee charges $300 minimum to form your LLC — but that number can climb fast, because Tennessee is one of the only states that prices formation and annual report fees per member. No personal income tax sounds great, but the franchise and excise tax most guides underplay is where Tennessee actually gets expensive.
To start a Tennessee LLC, file Articles of Organization with the Tennessee Secretary of State through the TNCaB portal. The fee is $50 per member, with a $300 minimum and $3,000 maximum — most LLCs with six or fewer members pay the flat $300. Online filings process immediately. Every LLC then files an annual report using the same fee formula, due April 1 for calendar-year filers. Separately, most LLCs owe franchise tax (0.25% of net worth, $100 minimum) and excise tax (6.5% of net earnings) to the Department of Revenue — though single-member LLCs owned by an individual are generally exempt. Tennessee has no personal income tax.
- State filing fee
- $50/member · $300 min · $3,000 max
- Processing time
- Immediate online
- Annual report
- Same formula · due April 1
- Franchise & excise tax
- 0.25% net worth + 6.5% net earnings
- Single-member LLC exemption
- Yes — from franchise/excise
- Personal income tax
- None
What to Know Before You Form in Tennessee
Tennessee isn't hard to form in, but its cost structure is genuinely different from most of this series, and worth understanding clearly:
- Fees scale with your member count — $50 per member for both formation and the annual report, with a $300 floor and $3,000 ceiling. A 6-member LLC pays the same $300 as a 1-member LLC; a 10-member LLC pays $500.
- Immediate online processing — among the fastest in this series once you submit.
- No publication requirement — your filing is complete once the Articles clear the Secretary of State.
- No personal income tax — the Hall tax on investment income was fully eliminated in 2021.
"No personal income tax" is genuinely true and genuinely incomplete. Most Tennessee LLCs — specifically multi-member LLCs, and single-member LLCs that elect corporate taxation — owe franchise and excise tax at the entity level, filed with the Department of Revenue, completely separate from your $300 annual report to the Secretary of State. This is the single most common point of confusion for new Tennessee LLC owners, and it's covered in full in Step 8.
How to Start a Tennessee LLC in 8 Steps
Your name must be distinguishable from every Tennessee entity and contain "LLC" or "Limited Liability Company." Search free through the Secretary of State.
Every Tennessee LLC must continuously maintain a registered agent — a TN resident or authorized entity with a physical in-state street address.
File the Articles of Organization
$50/member, $300 minimum, filed through TNCaB — online filings process immediately.
Not required by Tennessee, but it overrides state default rules and satisfies your bank.
Get Your Free EIN from the IRS
Your federal tax ID for banking, hiring, and Tennessee Department of Revenue registration. Always free at IRS.gov.
File Your Annual Report AND Check Franchise/Excise Tax
Two separate obligations: the $300 minimum annual report (Secretary of State, April 1), and franchise/excise tax if you're not exempt (Department of Revenue).
Get Business Licenses & Permits
No statewide general license — but county/city business licenses, sales tax registration, and professional board licenses as applicable.
Understand Tennessee LLC Taxes
No personal income tax, but franchise tax (0.25% net worth) and excise tax (6.5% net earnings) for most LLCs, plus a 7%+ sales tax.
What a Tennessee LLC Really Costs (2026)
| Cost Item | Amount | When |
|---|---|---|
| Articles of Organization (required) | $50/member · $300 min · $3,000 max | One-time, at formation |
| Annual report (required) | $50/member · $300 min · $3,000 max | Every year, due April 1 |
| Franchise tax (unless exempt) | 0.25% of TN net worth, $100 min | Annual, via FAE170 |
| Excise tax (unless exempt) | 6.5% of net earnings | Annual, via FAE170 |
| Registered agent service (optional) | $100–$150/yr | Annual, if hired |
| EIN from the IRS | $0 — always free | At IRS.gov |
Bottom line: $300 minimum to form, $300 minimum every year after for a typical LLC with six or fewer members — among the more expensive baseline costs in this series, before factoring in franchise and excise tax for LLCs that don't qualify for the single-member exemption. Model your exact setup below.
Tennessee LLC Cost Calculator
Tennessee LLC Cost Calculator
First-year + 5-year totals · verified July 2026
Excludes franchise/excise tax and state income tax (Tennessee has none). Member count directly drives both the formation and annual report fee.
Two Obligations, Two Agencies
This is worth stating plainly because it's the source of most Tennessee LLC confusion: your $300+ annual report goes to the Secretary of State and simply confirms your entity information. Your franchise and excise tax — if you're not exempt — goes to the Department of Revenue, filed on Form FAE170 through TNTAP, an entirely separate system with entirely separate rules. Paying one does not satisfy the other. See the full breakdown in Step 6.
Tennessee LLC Taxes at a Glance
Tennessee has no personal income tax on wages or business profit passed to individuals. But most LLCs — multi-member LLCs, and single-member LLCs that elect corporate taxation — owe franchise tax (0.25% of Tennessee net worth, $100 minimum) and excise tax (6.5% of net earnings). Single-member LLCs disregarded for federal tax purposes and owned by an individual are generally exempt from both. Add federal self-employment tax of 15.3%. Sellers collect 7% state sales tax plus local rates up to 2.75%, for a combined average around 9.5%. Details in Step 8.
Ahmad Adil's Take: I want to be genuinely upfront with anyone weighing Tennessee — the "no income tax" headline is accurate but incomplete, and I don't want that phrase to be the only thing you remember from this guide. If you're forming a standard single-member LLC and won't elect corporate taxation, Tennessee is honestly quite favorable: you likely qualify for the franchise and excise exemption, and your only real recurring state cost is the $300 annual report. If you're bringing on partners or investors, budget for the franchise and excise tax as a real, ongoing cost from day one — it's not a rare edge case, it's the default for most multi-member LLCs here.
- ✓Forms your Tennessee LLC for $39 + the $300 minimum state fee
- ✓Files online with the Secretary of State
- ✓Free Tennessee registered agent the first year
- ✓No upsells · No data selling · Privacy by Default
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Tennessee LLC — FAQ
Ahmad Adil is the founder and CEO of LLC School. The figures here — the $300 minimum Articles of Organization, the $300 minimum annual report due April 1, and Tennessee’s franchise and excise tax — reflect current Tennessee Secretary of State and Department of Revenue guidance. This is educational content, not legal or tax advice.
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