Reviewed Date: 10/22/2020
Revenue Class: Local Taxes
Account No.: 31810
Description: The business tax is levied in addition to all other privilege taxes and is intended by the legislature to be in-lieu-of any other ad valorem tax on “inventories of merchandise held for sale or exchange.” T.C.A. § 67-4-701 (b).
Authorization: T.C.A. § 67-4-701 et seq. (Business Tax Act)
Requirements or Restrictions: Businesses are required to file tax returns with the state on state subscribed forms.
Current Rate: A minimum of $22 annually is required for each taxpayer in classifications 1-4 and 5B ($450 annually fr classification 5A) for each fixed place, location or outlet from which a business is operated. The state has established different classifications of businesses and gross receipt rates assessed to the different classifications. The classifications and rates are listed in detail in T.C.A. § 67-4-708 and T.C.A. § 67-4-709. The rates include a wide range of percentages. Some examples are:
- 1/10 of 1 percent of all retail sales of the business for businesses classified under T.C.A. § 67-4-708 (1);
- 1/40 of 1 percent of all wholesale sales of the business by people classified under T.C.A. § 67-4-708 (1)(A);
- 3/80 of 1 percent of all wholesale sales of the business by people classified under T.C.A. § 67-4-708 (1)(B) and (1)(C), T.C.A. § 67-4-708 (2) and T.C.A. § 67-4-708 (3);
- 1/20 of 1 percent of all retail sales of the business by people classified under T.C.A. § 67-4-708 (1)(D);
- Transient vendors must pay a minimum tax of $50 for each 14-day period of business in a municipality, but they are not subject to the percent of the gross receipts portion of the tax. T.C.A. § 67-4-710 (a)(2).
The Tennessee Department of Revenue Business Tax Guide can be found at : https://www.tn.gov/content/dam/tn/revenue/documents/taxguides/bustaxguide.pdf
Frequency of Payment: Monthly. Due dates for different business classifications are listed under T.C.A. § 67-4-715.
Late Pay Penalty: N/A
Exemptions: Exemptions are listed under T.C.A. § 67-4-712. Businesses may deduct certain items from their gross receipts liability (listed under T.C.A. § 67-4-711). Certain credits are also allowed as listed in T.C.A. § 67-4-713.
Collection: State forwards municipality’s share monthly.
Use Restrictions: None.