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/yearRequired TN physical address
EINFreeApply at IRS.gov
Operating Agreement$0–$1,000Recommended, not legally required

4. How to Start a Tennessee LLC (Step by Step)

  1. 1 Choose your LLC name (must include "Limited Liability Company," "L.L.C.," or "LLC")
  2. 2 Appoint a registered agent with a Tennessee physical address
  3. 3 File Articles of Organization with the TN Secretary of State ($300 min)
  4. 4 Obtain an EIN from the IRS (free at IRS.gov)
  5. 5 Draft an Operating Agreement (not filed, but highly recommended)
  6. 6 Register with the TN Department of Revenue for Franchise and Excise taxes
  7. 7 File the Annual Report by April 1 each year ($300 min)
  8. 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