Doing Business in Tennessee: Everything You Need To Know
Doing business in Tennessee occurs when you operate a company here for profit and Tennessee ranks fourth when it comes to advantages for small businesses.3 min read
Doing business in Tennessee occurs when you operate a company in the state for profit. According to a report by Area Development, Tennessee ranks fourth in the nation when it comes to advantages for small businesses. This is measured by the cost of doing business, including everything from workforce to real estate, as well as local legislation, business taxation, state capital investment, and other incentives. Other states that rank high in these measures include Texas, South Carolina, and Georgia.
More than 70,000 private sector jobs in Tennessee have been created by Bill Hagerty, economic development commissioner, and Bill Hasham, governor. This is a record-setting level of growth that has made national headlines.
In 2014, the state was ranked first in the nation for Automotive Manufacturing Strength in Business Facilities for the fifth consecutive year.
Small business owners can benefit from Launch TN. This partnership funds the expansion of fast-growing companies based in the state. From technology and research and development to data and call centers, Tennessee has the manpower and resources your company needs to take off. More than 250 call centers state-wide employ more than 14,000 residents.
Some of the biggest sectors of the state's $287 billion economy include health care, agriculture, biotech, aerospace, energy, entertainment, auto manufacturing, chemical production, logistics, and food production. This sector supports one of the world's most innovative and influential R&D centers. Global research institutions based in Tennessee include:
The state's R&D industry includes more than 10,000 businesses employing more than 138,000 Tennessee residents.
If you plan to start a sole proprietorship or partnership in Tennessee, you must do business under your own legal name in most cases. Doing business as (DBA) names are available for corporations and limited liability companies.
When you decide on a name for your LLC or corporation, check the state's database and the U.S. Patent and Trademark Office trademark search system to make sure it is available. You can usually register a business online under a DBA name. In some counties, however, you may need to appear in person, so check with the county clerk's office to learn more about regulations.
When filing, you'll need to provide:
The filing fee for the DBA form is $20 and can be paid by check or cash. Once the process is complete, the state will confirm that your business name is registered.
When deciding to open a new business, you need to consider the state and local tax rates. Tennessee charges 6.5 percent excise and franchise tax on corporate income and state sales tax of 7 percent. Local sales tax varies by county but averages 2.45 percent.
As of July 2016, Tennessee using triple-weighting sales apportionment to calculate excise tax. This relieves the franchise and excise tax costs for larger companies based in the state while emphasizing sales tax over personal property and payroll tax.
Individual income is not taxed in Tennessee. However, a 6 percent tax called Hall income tax is applied to income from dividends and interest. Legislative sessions have recently focused on gradually eliminating this tax. Before opting to start a business in Tennessee, be sure to review and understand applicable tax laws.
If you need help with doing business in Tennessee, you can post your legal need on Legal Marketplace's marketplace.
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