Tennessee LLC Taxes Explained: F&E Tax Deep Dive (2026)
Tennessee owner-income and entity-tax duties are separate. This guide explains the F&E rules and illustrates Tennessee earnings and net-worth calculations without assuming an individual-owner exemption.
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 uses net earnings after applicable adjustments and the $50,000 standard deduction. Federal and sales-tax duties are separate.
- State personal income tax
- None
- Franchise tax
- 0.25% of net worth, $100 min
- Excise tax
- 6.5% of net earnings
- Single-member status
- No automatic individual-owner exemption
- Sales tax
- 7% + local up to 2.75%
- F&E filing
- Form FAE170 via TNTAP
The Tax Layers in Tennessee
Federal: income + self-employment tax
Pass-through profits hit your 1040 at your federal bracket, plus 15.3% SE tax on 92.35% of net profit — this applies regardless of state.
Tennessee state income tax: none
The Hall tax on interest and dividends was fully eliminated in 2021. Tennessee levies no personal income tax on wages or business profit.
Entity level: franchise + excise tax (unless exempt)
The real cost most guides underplay — see the dedicated section below.
Sales tax: 7% + local (if applicable)
State rate plus local add-ons up to 2.75%. See Step 7.
Estimate Your Combined Bill
Tennessee LLC Tax Estimator
Separate net worth and earnings inputs · no automatic individual-owner exemption
Franchise & Excise Tax, In Depth
Current F&E bases: the former real/tangible-property minimum measure was repealed for tax years ending on or after January 1, 2024. Franchise tax generally uses apportioned net worth at 0.25%, with a $100 minimum. Excise tax is 6.5% after applicable adjustments and the $50,000 standard deduction for tax years ending on or after December 31, 2024. Filing and estimated-payment duties remain even if a deduction reduces tax. DOR property-measure repeal.
The S-Corp Question
An S election changes federal tax treatment and adds compensation/payroll duties. It does not create a new Tennessee liability simply because an individually owned LLC was previously federally disregarded: that status alone never supplied the claimed Tennessee exemption. Evaluate any specific statutory exemption and the corporate-owner rule separately. DOR disregard rule.
Your Tennessee Tax Calendar
| Date | What's Due |
|---|---|
| Apr 15 / Jun 15 / Sep 15 / Jan 15 | Quarterly estimated taxes — federal, on pass-through profit |
| April 1 | Annual report to the Secretary of State ($50/member, $300 min) |
| April 15 | Form FAE170 franchise/excise return (or exemption confirmation) to the Department of Revenue |
| Apr 15 | Form 1040 — no separate state income tax return needed |
| Monthly/Quarterly | Sales tax returns via TNTAP, if applicable |
Before filing: identify the actual owner, federal classification, Tennessee tax bases and any specific exemption. Do not infer exemption from having only one individual owner. Individual-owned LLC filing rule; exemptions and applications.
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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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