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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.
On this page, you’ll learn about the following:
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  | $0 + State Fees |
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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.
| States | Filing Fee | Annual/Biennial Fee | Sales Tax |
| Tennessee | $300+ | $300 | 7% |
| Kentucky | $40 | $15 | 6% |
| Virginia | $100 | Not Required | 5.3% |
| North Carolina | $125 | $200 | 4.75% |
| Georgia | $100 | $50 | 4% |
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
- Tenneessee Name Reservation: $20 by mail
- Doing Business As (DBA): $20 for online filling or if filing by mail
- Certified Document Copies: $20 per page.
- Certified of Good Standing: $20
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of Tennessee LLC: $20
F.A.Qs
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
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.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
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.
One of the primary costs associated with maintaining an LLC in Tennessee is the annual filing fee. Every LLC registered in the state is required to file an annual report and pay a fee to the Secretary of State. This report provides updated information about the business, including the name and address of the LLC, the names of its members, and its registered agent. Failing to file this report on time can result in penalties and even the dissolution of the LLC, so it is important to budget for this recurring expense.
In addition to the annual filing fee, LLCs in Tennessee are also subject to any necessary business licenses and permits, which can vary depending on the nature of the business and its location. These costs can add up, especially for businesses operating in industries that require specialized certifications or approvals. It is important for LLC owners to research and understand the specific requirements for their type of business in order to budget appropriately for these expenses.
Another potential cost associated with maintaining an LLC in Tennessee is the cost of hiring a registered agent. Every LLC in the state is required to have a registered agent who can receive legal documents and official notices on behalf of the business. While LLC owners can serve as their own registered agent, many choose to hire a professional service to handle this responsibility. This service typically comes with a yearly fee, which varies depending on the provider and level of service.
Aside from these recurring costs, LLC owners in Tennessee should also be prepared for any unforeseen expenses that may arise throughout the year. This could include legal fees, accounting services, or any other professional services that may be needed to maintain the LLC in compliance with state regulations. It is important to have a buffer in place for these unexpected costs in order to prevent any financial strain on the business.
In conclusion, maintaining an LLC in Tennessee involves a number of ongoing costs that business owners need to consider when planning their budget. From the annual filing fee to the cost of a registered agent, as well as any necessary licenses and permits, it is important to be aware of these expenses in order to keep the LLC in good standing. By understanding and budgeting for these costs, LLC owners can ensure the successful operation of their business in the state of Tennessee.
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.