1. Tennessee LLC Overview
Tennessee, particularly Nashville, is a booming business destination. While the lack of personal income tax is a huge draw, the state replaces that revenue through business taxes and higher-than-average LLC fees.
- No personal income tax — Keep more of your pass-through profits at the personal level
- High minimum fees — Both formation and annual reports cost a minimum of $300
- Franchise & Excise Taxes — An additional layer of tax applied to the LLC's net worth and net earnings
Per-Member Pricing
Tennessee is unique in how it charges LLC fees. The cost is $50 per member. However, there is a minimum fee of $300 (covering 1 to 6 members). If your LLC has 10 members, your formation and annual report fees will be $500.
2. Tennessee LLC Requirements
- Name must contain "Limited Liability Company," "L.L.C.," or "LLC"
- Appoint a registered agent with a Tennessee physical address
- File Articles of Organization with the Secretary of State ($300 min)
- Register with the TN Department of Revenue
- File an Annual Report by April 1 each year ($300 min)
- File Annual Franchise & Excise tax returns
3. Tennessee LLC Costs and Fees (2026)
| Cost Item | Amount | Notes |
|---|---|---|
| Articles of Organization | $300 minimum | $50 per member (max $3,000) |
| Annual Report | $300 minimum | $50 per member; due April 1 |
| Registered Agent | $50–$150/year | Required TN physical address |
| EIN | Free | Apply at IRS.gov |
| Operating Agreement | $0–$1,000 | Recommended, not legally required |
4. How to Start a Tennessee LLC (Step by Step)
- 1 Choose your LLC name (must include "Limited Liability Company," "L.L.C.," or "LLC")
- 2 Appoint a registered agent with a Tennessee physical address
- 3 File Articles of Organization with the TN Secretary of State ($300 min)
- 4 Obtain an EIN from the IRS (free at IRS.gov)
- 5 Draft an Operating Agreement (not filed, but highly recommended)
- 6 Register with the TN Department of Revenue for Franchise and Excise taxes
- 7 File the Annual Report by April 1 each year ($300 min)
- 8 Open a business bank account
5. Tennessee Annual Report
Tennessee LLCs must file an Annual Report to maintain their good standing with the Secretary of State.
- Due Date: April 1 of each year, beginning the year after formation.
- Fee: $300 minimum ($50 per member).
6. Tennessee Franchise & Excise Taxes
While there is no personal income tax, Tennessee imposes two primary taxes on LLCs:
- Excise Tax (6.5%): A tax on the net earnings or income of the LLC doing business in Tennessee.
- Franchise Tax (0.25%): A tax based on the greater of the LLC's net worth or the book value of real/tangible property owned in Tennessee. (Note: recent legislative changes exempt the first $500,000 in property value).
There is a minimum $100 Franchise Tax owed, even if the LLC operates at a loss.
7. Best For / Not Best For
Best For
- Entrepreneurs living and operating in Tennessee
- Founders wanting no personal state income tax
- Established, profitable businesses moving to Nashville or other TN hubs
Not Best For
- Cost-sensitive founders: Tennessee has a $300 minimum fee for both formation and annual reports
- Out-of-state owners without TN nexus
- Founders unaware of the TN Franchise and Excise tax obligations