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Sole proprietorships are not subject to franchise and excise tax because they do not provide their owners limited liability protection. Sole proprietorships report their business activity on federal Form 1040, Schedules C, E, or F. General partnership (?GP?) is defined by Tenn.

Overview. If you are a corporation, limited partnership, limited liability company, or business trust chartered, qualified, or registered in Tennessee or doing business in this state, then you must register for and pay franchise and excise taxes.

There is no state income tax in Tennessee. This means you don't have to file an individual state income tax return each year. That said, while there is no state income tax in Tennessee, LLCs will most likely need to pay the Tennessee Business Tax, Franchise Tax, and Excise Tax each year.

Franchise tax 0.25% of the greater net worth or real tangible property in Tennessee. The minimum tax is $100.

There are some exemptions to filing franchise and excise tax. For example, certain limited liability companies, limited partnerships and limited liability partnerships whose activities are at least 66% farming or holding personal residences where one or more of its partners or members reside are exempt.

Religious, scientific, educational, charitable, and non-profit organizations must apply to obtain exempt status. Tennessee State law allows the Assessor to aid the property owner in the exempt application process, but the authority to exempt property resides with the Tennessee State Board of Equalization (SBOE).