Tennessee adjusts business tax requirements amid post-COVID economic shifts

The Tennessee Department of Revenue held a New Business Workshop on July 10, 2025, aimed at guiding entrepreneurs through the complexities of business tax regulations in the state. This workshop is particularly relevant as Tennessee has seen a surge in new businesses, especially following the influx of remote workers relocating to the state post-COVID-19.

A key focus of the meeting was the criteria for establishing "nexus," which determines a business's tax obligations in Tennessee. Businesses must meet specific thresholds related to gross sales, compensation, and property value to be subject to business taxes. For instance, if a business has gross sales exceeding $100,000 in any county in Tennessee, it is required to register for business tax. This threshold was raised from $10,000 in previous years, reflecting the evolving economic landscape.

The workshop also clarified the licensing requirements for businesses based on their annual gross sales. Businesses earning less than $3,000 annually are not required to obtain a business license, while those with sales between $3,000 and $100,000 need a minimal business license. For businesses exceeding $100,000 in sales, a standard business license is necessary, which must be renewed annually through the payment of business taxes.

Participants were informed about the importance of timely filing and payment of business taxes, as delays could incur penalties and interest. The workshop emphasized that business tax returns are due on the 15th day of the fourth month following the end of the fiscal year, with no extensions available except in extreme circumstances.

The discussions highlighted the significance of understanding the classification of businesses, as tax rates vary between retailers and wholesalers. This classification impacts the overall tax liability, making it crucial for business owners to accurately determine their primary business activities.

In conclusion, the New Business Workshop served as a vital resource for Tennessee entrepreneurs, equipping them with essential knowledge about tax obligations and licensing requirements. As the state continues to attract new businesses, these workshops will play a crucial role in fostering a supportive environment for economic growth and compliance.