LLC Cost in Tennessee – How Much to Pay for an LLC


Save time & be confident while starting your Tennessee LLC; use best professional help -
#1 TOP PICK
 TailorBrands - ($49 + State Fees) Online Tennessee LLC Setup
tennessee_state_seal

Perhaps you are hoping to form an LLC in Tennessee. People assume that starting an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Tennessee.

Tennessee LLC Cost of Filing

Here are the costs involved in forming an LLC in Tennessee.

Cost of Filing Formation Certificates

The Tennessee Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Tennessee Secretary of State

Tennessee Domestic LLC

  • Online Filing costs $300. 
  • Annual Report filing costs a minimum of $300 to a maximum of $3000
  • Name Reservation fee costs $20
  • By Mail: Fill out the application form, and send it to Secretary of State’s office at 6th FL – Snodgrass Tower ATTN: Corporate Filing, 312 Rosa L. Parks AVE, Nashville, TN 37243.
  • $50.00 per member in existence on the date of the filing, with a minimum fee of $300.00 and a maximum fee of $3,000.

Tennessee Foreign LLC

  • By Mail: Fill out the application form, and send it to Secretary of State’s office at 6th FL – Snodgrass Tower ATTN: Corporate Filing, 312 Rosa L. Parks AVE, Nashville, TN 37243.
  • $50.00 per member in existence on the date of the filing, with a minimum fee of $300.00 and a maximum fee of $3,000.
  • Annual Report filing costs a minimum of $300 to a maximum of $3000
  • Name Reservation fee costs $20

Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.

Tennessee LLC Formation Service or Registered Agent Fee

You need a registered agent to form an LLC in Tennessee, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.

LLC Service

Our Rating & Pricing

Top Features

Learn More

#1 TOP PICK

$49 + State Fees

  • Set up LLC without hassle

  • Take you through all steps

  • Start your LLC worry-free

$299 + State Fees

  • Turnaround in a few days

  • EIN & Website Included

  • Operating Agreement Included

Business Permits and Licenses 

The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the Tennessee Department of Revenue for regulatory boards or agencies requiring licensing. 

Taxes Payable to Tennessee Department of Revenue

To register an LLC in Tennessee, an LLC must pay several taxes to the federal and Tennessee governments. Let’s take a  look at some of the important taxes that are to be paid by LLCs in Tennessee. An LLC in the state of Tennessee pays two types of taxes to the Tennessee State Department of Revenue:

State Income Tax

Someone who has an LLC doesn’t have to pay any Income Tax on the earnings. Instead, the LLC is bound to pay the State Income Tax on the Stock Dividends & any Interest received from the bonds or notes. Such type of  Income tax is usually known as Hall Income Tax.

State Sales & Use Tax 

The state of Tennessee levies Sales & use tax on tangible goods & services provided by an LLC. The State Sales & Use tax rate in Tennessee is 7%.

Tennessee Franchise & Excise Tax

The State of Tennesse has one more type of tax, which needs to be paid by the LLC. This tax is called the Franchise & Excise Tax. This tax is levied on certain legal entities, such as an LLC to enable them to exist & do business in the state. Although it is called the Franchise tax, it is an essential tax that an LLC has to pay at the time of filing. The current Franchise & Excise tax in the state of Tennessee is 6.5%

Federal Self-Employment Tax

All the members who run the LLC are self-employed members; because they pay themselves through the LLC. Federal Self Employment Tax, also known as Social Security or Medicare tax, is paid by all such members or managers. The Federal self-employment tax rate in Tennessee is 15.3 percent. 

Federal Income Tax

If you are in the state of Tennessee, you must pay Federal Income Tax, in addition to the State Income Tax. The amount of the Federal Income Tax depends upon your earnings, the income tax bracket your LLC falls, the deductions, & the manner/ mode of filing.

You pay Federal Income Tax on all the profits your LLC makes after calculating the deductions & allowances such as Healthcare or Retirement Plans.

Employee & Employer Taxes

An LLC that has several employees on payroll has to pay the Employee-Employer taxes. These taxes are calculated on the basis of various factors, e.g., the amount earned, number of employees, etc.

Cost Comparison between states

Tennessee is surrounded by many states, namely Kentucky, Virginia, North Carolina, Georgia, etc. Each of these states has a different rate of taxes levied on LLCs. Let us take a look at this comparative chart.

StatesFiling FeeAnnual/Biennial FeeSales Tax
Tennessee$300+$3007%
Kentucky$40$156%
Virginia$100Not Required5.3%
North Carolina$125$2004.75%
Georgia$100$504%

Based on the kind of industry you LLC operated in, your LLC will be liable to some other taxes & duties. For Example, if your LLC is in the sector of import & export, you have to pay the import-export duty. You should consult with a professional to verify the tax rates or business costs of registering an LLC in Tennessee.

Other Costs

How Much Does It Cost to Maintain an LLC in Tennessee

To maintain an LLC in Tennessee you will need to pay an annual fee of $300 along with state sales & use tax at 7%, state franchise & excise tax at 6.5% and federal taxes.

To operate an LLC in Tennessee, you will need to pay annual fees. These fees are calculated based on the number of members and the gross revenue your company generates in a fiscal year. The costs for these fees may vary depending on the size of your business. You can find a complete list of fees and forms at the Tennessee Secretary of State’s website.

In addition to annual fees, you must register your LLC with the Tennessee Department of Revenue. You’ll need to pay at least $22 per location on an annual basis. You’ll also need to pay state and federal taxes. The state of Tennessee also requires that you hire a registered agent, or an agent who has an office in Tennessee. This person will be the point of contact for all legal documents regarding your LLC. The registered agent will need to be available during normal business hours so that they can accept and respond to any legal documents that come their way.

Another document you’ll need to request is a Certificate of Existence. This document is required by lenders and bankers. The fee for obtaining this document is $20 and you can pay online with a credit card or debit card. You’ll also need to pay for the certificate every year.

The next step in starting an LLC in Tennessee is to file the Articles of Organization. This document is the foundation of your business. It is mandatory in Tennessee and can be filed either online or through the mail. The fee for filing the Articles of Organization varies depending on the number of members in your LLC. For each member, the fee ranges from $300 to $3,000. You can pay for the filing fee online, but it’s important to note that the filing fee is nonrefundable and cannot be changed once it has been submitted.

In addition to the annual filing fee, LLCs in Tennessee are required to pay an annual license fee. Depending on the type of business, this license can cost as much as $300. If you are planning to operate your business out of Tennessee, you may also need to pay a $15 fee for a business license in the state.

In addition to filing an annual report, LLCs must also pay an annual franchise tax. These taxes aren’t a tax on the franchised business, but rather a tax on the privilege of conducting business in the state. The tax is calculated on the net worth of the entity, including tangible property in the state.

In order to register your LLC, you must first select a name that is distinctive from any other company in the state. You can use the Tennessee Secretary of State’s Search Name Availability Tool to make sure the name you choose is not already used by another company. An application for a name reservation can be filed online or via mail.

F.A.Qs

Can I start an LLC for free?

It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.

Is an LLC expensive?

It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.

Does an LLC need a bank account?

The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.

In Conclusion

The cost of Tennessee is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.

Leave a Comment