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State Taxes

Rutherford County offers a low overall tax burden as well as an impressive array of local and state incentives that can assist companies in relocating and/or expanding their current facility. For more information on incentives that will match your company’s specific needs, please contact This email address is being protected from spambots. You need JavaScript enabled to view it., Vice President of Economic Development.

Corporate Income or Excise Tax

Tennessee levies an excise tax of 6.5% on net earnings of corporations, foreign and domestic, arising from business done within the state, or on state apportionment of total earnings of interstate corporations. All taxes are deductible in determining the state excise tax base except the Tennessee excise tax and income taxes paid to the federal government or foreign governments.

For more information, please contact the Tennessee Department of Revenue, Taxpayer Services Division, at (615) 253-0600 or visit http://www.tennessee.gov/revenue/tntaxes/.


Business or Gross Receipts Tax

Local governments in Tennessee levy a tax on gross receipts of specified types of businesses including retailers, wholesalers, persons performing services and contractors. The tax is levied as a substitute for a property tax on inventories. All businesses must register with the local county court clerk within 15 days of beginning business in Tennessee to pay the filing fee ($15) or business license tax. At this time the clerk will assign the business a classification and gross receipts tax rate. Thereafter, the business pays the annual filing fee with the annual payment of the gross receipts tax. The tax rate varies from 3/8 to 1/40 of 1 percent of gross receipts with manufacturers and certain professionals exempt from taxation. The minimum tax burden is the $22 annual license fee and recording fee.  

For more information, please contact the Tennessee Department of Revenue, Taxpayer Services Division, at (615) 253-0600 or visit http://www.tennessee.gov/revenue/tntaxes/


Sales & Use Tax

The sales tax applies to any person or company that manufactures, distributes or retails tangible personal property within the state. Many services are also taxable.

The basis used to determine the tax rate is the price of the tangible property sold at retail. Any business liable for collection and payment of the sales and use tax is required to register with the Tennessee Department of Revenue. For more registration information, call 800-342-1003.

No sales tax is paid on the following:

    • Purchases, installations and repairs of qualified industrial machinery
    • Raw materials for processing
    • Air and water pollution equipment for manufacturers (other air and water pollution equipment may be eligible for a sales tax credit)
    • Any materials that become a component part of the finished product
    • Purchases of material handling and racking equipment by a distribution or warehouse facility (to qualify, the taxpayer must invest in building and equipment in excess of $10 million over a period of three years or less)
    • Many 501(c) organizations

Additional Sales Tax Benefits:

    • Reduced sales tax rate (1.5 percent) for manufacturers' use of energy fuel and water (tax-exempt if used directly in the manufacturing)

Sales Tax Items with Discounted Rates for Manufacturers

Type of Tax

State

Local

Total

Energy/Fuel

1.50%

0%

1.50%

Water

1.00%

0.50%

1.50%

For more information, please contact the Tennessee Department of Revenue, Taxpayer Services Division, at (615) 253-0600 or visit http://www.tennessee.gov/revenue/tntaxes/


Franchise Tax

The Tennessee franchise tax is based on one of two factors either the greater of the Tennessee portion of net worth or book value of property owned or used within the state. The tax applied to foreign and domestic corporations doing business in the state (including business trusts, regulated investment companies, limited liability companies and limited partnerships).

Exempt organizations include nonprofit, welfare and "industrial development" corporations, building and loan associations, production credit associations, credit unions and investment companies.

The tax rate is 25 cents per $100 of the basis. The due date is the 15th day of the fourth month following the close of the corporation's fiscal year. Franchise and excise taxes are computed together, reported on the same form and paid at the same time.

For more information, please contact the Tennessee Department of Revenue, Taxpayer Services Division, at (615) 253-0600 or visit http://www.tennessee.gov/revenue/tntaxes/


Personal Income Tax

Tennessee does not tax earned income.


Professionals Tax

Tennessee levies a tax of $200 annually on a wide range of professional persons, including engineers, architects, health care practitioners, attorneys, investment and securities professionals, and others. Payment is required of all those who maintain their current credentials.