At a Department of Revenue webinar for new business owners, presenters laid out who in Tennessee must register and pay business tax and how local business licenses tie to state filings.

Katie Julian, member of the taxpayer services, taxpayer education team, described the licensing threshold and filing obligations: businesses with annual gross sales of $3,000 to $100,000 generally need a minimal local business license and do not owe business tax; businesses with more than $100,000 in annual gross sales must obtain a standard business license and file an annual business tax return. "If you make between 3,000 and 100,000 annual in gross sales, you are gonna be required to obtain a minimal business license from your local clerk," Julian said.

Why it matters: the license type determines whether a business must file a business tax return and which local clerks will issue and renew the license. For standard licenses, county clerks receive clearance information from the Department and renew licenses based on the business tax filing record.

Key points presented:
- Nexus and activity: a business must have substantial nexus and be engaged in taxable activities with attributed sales of $100,000 or more in Tennessee to owe business tax. Presenters described Bright-Line presence tests for out-of-state businesses (based on Tennessee receipts, property, or compensation thresholds).
- Classifications and rates: business tax uses five statutory classifications (Class 1–5) and retailer/wholesaler distinctions to set rates; classification depends on dominant business activity and should be coordinated between county and municipal licenses to avoid inconsistent local filings.
- Common deductions: returns allow deductions such as sales of goods to customers out of state, refunded sales, sales in interstate commerce, cash discounts, repossessions/trade-ins, certain bad debts and amounts paid to subcontractors (subcontractor worksheet must show subcontractor name, address, license or business license number, payment amount and date).
- Filing and due dates: the business tax return is due the 15th day of the fourth month after a fiscal year end (for calendar-year filers, April 15). There is no routine filing-extension option for business tax; limited extensions have been granted rarely for events such as natural disasters.

Contractors and subcontractors: presenters emphasized careful recordkeeping for contractor businesses. Payments to subcontractors may be deductible but require the subcontractor's business license number or contractor license number and other details on Schedule C (subcontractor worksheet).

Resources: the Department's business tax manual, business-tax-specific webinars and the TenTap portal were recommended as primary resources for classification, rate lookup and filing instructions.

Ending: the Department advised businesses to verify local and county classifications match and to contact the Department if they need help switching between minimal and standard license status to avoid incorrect filings or duplicate local accounts.