Federal taxation of an LLC
By default, single-member LLCs are taxed as sole proprietorships and multi-member LLCs are taxed as partnerships. In both cases, profits and losses pass through to the owners' personal tax returns — there's no separate "LLC tax" at the federal level.
LLCs can also elect to be taxed as an S-Corporation by filing IRS Form 2553. This can save self-employment taxes for profitable LLCs. Try our S-Corp savings calculator.
Tennessee state income tax
Tennessee treats LLC income similarly to the federal default — it passes through to the owners' personal state income tax returns. Some states (like Texas, Wyoming and Nevada) have no personal income tax at all.
Franchise tax
Some states impose an annual franchise tax — a flat fee or percentage of revenue charged just for the privilege of doing business as an LLC. Notable examples are California's $800 minimum and Delaware's $300.
Sales tax
If your business sells physical products or certain taxable services to customers in Tennessee, you'll likely need to register for a state sales tax permit and collect sales tax. Use our sales tax calculator to estimate your obligation.
Employer taxes
If your LLC has employees, you'll need to register for state unemployment insurance and withhold state income tax from paychecks. We can refer you to a payroll provider that handles all of this automatically.
This isn't tax advice
StartBrandz is not a tax professional. Tax laws change and every situation is unique — please consult a CPA or tax attorney for advice specific to your business.