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TNFair for non-residents

Forming a company in Tennessee

Tennessee charges no personal income tax, then applies franchise and excise tax at entity level. It is a state where the headline and the invoice disagree.

LLC, all in
$567
Corporation, all in
$360
Every year after
$310 every year
Typical timeline
Typically 3–5 business days.
Form in TennesseeAsk if it fits your business
The Short Version

Is Tennessee right for you?

Tennessee is regularly listed among the no-income-tax states, which is true for individuals and misleading for companies. LLCs are subject to franchise and excise tax at entity level, with a minimum of $100 a year and more once the company has net worth or income of substance.

Filing fees scale with membership, and the state has one of the highest combined sales tax rates in the country, frequently above 9.5%.

None of that makes Tennessee a bad state — Nashville and Memphis support real music, healthcare and logistics economies, and a Tennessee entity makes obvious sense if you are operating there. It simply should not be chosen on the strength of a no-income-tax headline that does not apply to your LLC.

Best suited to
  • Businesses genuinely operating in Nashville, Memphis or Knoxville
  • Healthcare, music and entertainment companies
  • Logistics operations using Memphis air freight infrastructure
Worth knowing first
  • Franchise and excise tax applies to the LLC itself, minimum $100 a year
  • Combined sales tax often exceeds 9.5% — among the highest in the country
  • Filing fees rise with the number of members
Tax Snapshot

What Tennessee taxes

A summary, not advice — your actual position depends on where you live, where your customers are, and how the company is treated federally.

Income tax

No personal income tax, but franchise and excise tax applies at entity level

Sales tax

7% state rate plus local, often above 9.5% combined

Franchise tax

Franchise and excise tax on net worth or income, minimum $100 a year

Fair

Tennessee for a non-resident founder

Open to non-residents, but the entity-level tax and higher costs mean it should be chosen for a business reason rather than as a tax play.

Staying Compliant

What Tennessee asks for every year

Formation is the easy part. These are the obligations that keep the company alive — and the ones people forget.

  1. 01

    Annual Report

    Due by the first day of the fourth month after your fiscal year end. The fee scales with member count.

  2. 02

    Franchise & Excise Tax

    Filed with the Department of Revenue. Minimum $100 a year, more depending on net worth and income.

  3. 03

    Registered Agent

    A Tennessee street address, maintained continuously.

Compare

Check Tennessee against another state

Switch entity type or state and the total updates instantly. The state filing fee is always included.

1 · Entity type
2 · State of formation
Total to form your company
$304LLC

All-in — our service fee and the Wyoming state filing fee are both included.

Ongoing state cost
$60 minimum every year
Typical processing
1–5 business days, then your EIN
Start My LLCSee every state side by side

State fees reviewed August 2026 and can change without notice — we confirm your exact total in writing before anything is filed. Ongoing state costs are the state’s own charges and are not marked up by us.

Tennessee FAQ

Questions we get about Tennessee

Is Tennessee really a no-income-tax state?

For individuals, yes. For LLCs, no — franchise and excise tax applies at entity level with a $100 minimum. This is the single most common misunderstanding about forming here, and it is why we flag it before you file.

When does Tennessee make sense?

When you are actually operating there. Nashville healthcare, Memphis logistics and the music industry are real reasons. Choosing Tennessee from abroad for tax reasons is choosing it for a benefit that does not apply to you.

FormationXperts is not a law firm and does not provide legal or tax advice. Where needed, we coordinate with licensed professionals. We prepare and file your paperwork correctly; final approval and timelines are determined by the relevant government authority.

Get Started

Ready to form in Tennessee?

We will confirm your exact total in writing first — and tell you if a different state would serve you better.

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