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.
Formation and annual reports each use $50 per member, $300 minimum and $3,000 maximum. Calendar-year Annual Reports are due April 1. Check processing with the SOS. Individual ownership and federal disregarded status do not by themselves exempt an LLC from Tennessee franchise and excise tax. A federally disregarded SMLLC with a corporate sole owner can qualify for Tennessee’s limited disregard rule; its activity is included with the owner. FONCE and other exemptions have separate statutory conditions and filing procedures.
- State filing fee
- $50/member · $300 min · $3,000 max
- Processing time
- Check current SOS queue
- Annual report
- Same formula · due April 1
- Franchise & excise tax
- 0.25% net worth + 6.5% net earnings
- Single-member tax status
- No automatic individual-owner exemption
- 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.
- Processing varies. Confirm current SOS instructions, queue and accepted filing.
- No newspaper publication requirement applies to ordinary Tennessee LLC formation. Accepted Articles form the LLC; annual reports, taxes, licenses and other setup obligations remain separate.
- No personal income tax — the Hall tax on investment income was fully eliminated in 2021.
Budget the separate tax obligations. Individual ownership and federal disregarded status do not by themselves exempt an LLC from Tennessee franchise and excise tax. A federally disregarded SMLLC with a corporate sole owner can qualify for Tennessee’s limited disregard rule; its activity is included with the owner. FONCE and other exemptions have separate statutory conditions and filing procedures. DOR individual-owner guidance.
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 per member, $300 minimum and $3,000 maximum. Follow the current TNCaB route and check the accepted filing; processing depends on workload and corrections.
An operating agreement can address ownership, management and applicable default rules. Mandatory law still controls; banks set their own documentation requirements.
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) | Actual service quote and renewals | Annual, if hired |
| EIN from the IRS | $0 — always free | At IRS.gov |
Formation and annual-report fees use $50 per member, with a $300 minimum and $3,000 maximum each. Tax obligations, licenses and optional services are additional; individual ownership alone does not provide an F&E exemption.
Tennessee LLC Cost Calculator
Tennessee Formation and Report Budget
Budget includes formation plus one or five annual-report cycles, not an exact calendar-year payment schedule. Uses a constant member count and entered provider quotes. Excludes franchise/excise tax, federal tax, licenses, payment charges and other services. Individual ownership does not itself remove F&E obligations.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
Individual ownership and federal disregarded status do not by themselves exempt an LLC from Tennessee franchise and excise tax. A federally disregarded SMLLC with a corporate sole owner can qualify for Tennessee’s limited disregard rule; its activity is included with the owner. FONCE and other exemptions have separate statutory conditions and filing procedures. Franchise tax generally uses Tennessee-apportioned net worth at 0.25%, with a $100 minimum. Excise tax is 6.5% of the applicable net-earnings base after adjustments, including the applicable $50,000 standard deduction. Federal and sales taxes are separate.
Practical budget: keep SOS fees, Department of Revenue F&E filings and tax, federal taxes and licenses separate. Confirm a specific exemption or corporate-owner disregard rule before removing F&E from the budget. Corporate-owner disregard; conditional exemptions.
- ✓Optional formation assistance; confirm filing scope, service pricing and submission responsibilities. Government fee reference: $300 minimum state fee.
- ✓Optional formation assistance; confirm filing scope, service pricing and submission responsibilities.
- ✓Confirm registered-agent eligibility, coverage, included periods and renewal charges.
- ✓Review address-use rules and privacy policies; a service does not remove all information from public filings.
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Tennessee LLC — FAQ
Ahmad Adil is the founder and CEO of LLC School. For filing and ongoing compliance, confirm the requirements with the responsible state agency. This is educational information, not legal or tax advice.
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