Built from official Secretary of State sources · Updated April 2026 · Instant PDF download

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TENNESSEE

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Tennessee LLC annual report: Why it’s one of the most expensive in the nation

Tennessee has one of the highest LLC annual report fees in the entire country, and the cost scales with the number of members in your LLC. Here’s the full breakdown for 2026.

The base fee is $300. Every Tennessee LLC with 1 to 6 members pays a flat $300 annual report fee. This applies whether you have one member or six — the fee is the same. For a single-member LLC, $300 per year just for the annual report is a significant recurring cost that many owners don’t anticipate when they choose to form in Tennessee.

The fee increases with members. If your LLC has more than 6 members, you pay the $300 base plus $50 for each additional member beyond six. An LLC with 10 members pays $500 ($300 + 4 × $50). The maximum fee caps at $3,000 for LLCs with 60 or more members.

When is it due? The Tennessee annual report is due on the 1st day of the 4th month after the end of your LLC’s fiscal year. For most LLCs using a calendar year (January through December), that means April 1. New LLCs are not required to file in their formation year — the first report is due the following year.

What about Tennessee’s franchise and excise taxes? In addition to the annual report, Tennessee LLCs are subject to franchise tax and excise tax — and this is where Tennessee gets really expensive. Unlike most states, Tennessee does not treat LLCs as pure pass-through entities for state tax purposes. The franchise tax is based on the greater of your LLC’s net worth or the book value of real and tangible property in Tennessee, with a minimum of $100. The excise tax is effectively an income tax at 6.5% on net earnings. These taxes are filed with the Department of Revenue, separately from the annual report filed with the Secretary of State.

The 60-day grace period. Tennessee provides a 60-day grace period after the annual report deadline. If you miss April 1, you have until roughly June 1 to file before the state begins administrative dissolution proceedings. After that 60-day window, your LLC can be dissolved — losing its legal standing, liability protections, and potentially its business name.

Total minimum annual cost for a Tennessee LLC: $300 (annual report) + $100 (minimum franchise tax) + excise tax on earnings = at least $400 per year before any revenue is earned. For a profitable multi-member LLC, the total state tax burden can be substantial.

What catches Tennessee business owners off guard

Tennessee requires LLCs to file an annual report by April 1 each year — and the filing fee is $300 per member, with a minimum of $300 and a maximum of $3,000. For a single-member LLC, that’s $300 per year just for the annual report — one of the highest per-member fees in the country. Multi-member LLCs face even steeper costs, with each member adding $300 to the annual bill.

Tennessee’s franchise tax adds another layer: it’s imposed on the greater of the LLC’s net worth or the book value of real or tangible personal property owned in Tennessee. The minimum franchise tax is $100. Combined with the annual report fee, even a small single-member LLC in Tennessee faces $400+ per year in mandatory state fees before considering any other compliance obligations. Tennessee also has no personal income tax on wages (the Hall Tax on investment income was fully repealed in 2021), which attracts entrepreneurs who don’t realize the business-level fees partially offset the individual tax savings.

Tennessee Business Compliance

Quick-Start Teaser

Avoid the biggest traps new owners face – from my 27-page full guide

PHASE 1: BUSINESS PLANNING & LEGAL STRUCTURE

Validate idea, choose entity (LLC/S-Corp/etc.), register with Secretary of State, get EIN, DBA, operating agreement/bylaws.

■ TRAP ALERT: Assuming ‘zero personal income tax’ means no LLC taxes → TN has a TRIPLE entity tax system: franchise tax ($100 minimum), excise tax (6.5% net earnings), and business tax (gross receipts) — even inactive LLCs must file.

PHASE 2: STATE & LOCAL REGISTRATIONS

Register for state tax accounts, sales/gross receipts tax, local licenses and permits, unemployment insurance, new hire reporting. $0 revenue)

■ TRAP ALERT: Missing the combined franchise and excise tax return (Form FAE170, due April 15 — even for → Even dormant LLCs must file a zero-dollar F&E; return and pay $100 minimum franchise tax — failure triggers penalties.

PHASE 3: FEDERAL COMPLIANCE

Check federal licenses, set up payroll taxes (EFTPS), I-9 for hires, workplace safety (OSHA/state plan).

■ TRAP ALERT: Commingling personal and business funds → Pierces the corporate veil and exposes your personal assets to lawsuits and debts.

PHASE 4: INSURANCE & RISK MANAGEMENT

General liability, workers’ comp (required in most states), state-mandated benefits, standard contracts/agreements.

■ TRAP ALERT: Skipping workers’ comp with 5+ employees (construction: ALL contractors regardless of size) → Misdemeanor, fines up to $10,000, and personal liability.

PHASE 5: FINANCIAL SETUP & TAX COMPLIANCE

Open dedicated business bank account, set up bookkeeping/accounting systems.

■ TRAP ALERT: Not understanding that TN’s ‘zero income tax’ is offset by the excise tax (effectively 6.5% on entity earnings) → For profitable LLCs, TN’s 6.5% excise tax can EXCEED what you’d pay in personal income tax in states like KY (3.5%) or AR (3.9%).

PHASE 6: OPERATIONS & ONGOING COMPLIANCE

Navigate ongoing taxes/regulations, maintain compliance calendar, annual filings.

■ TRAP ALERT: Missing ongoing filings or poor record-keeping → Escalating penalties, audits, or forced dissolution.

Operating in nearby states? Tennessee’s high fees are just the start — neighbors have their own traps. See our guides for Kentucky, Georgia, North Carolina, and Alabama.

The complete Tennessee compliance package

Our full Tennessee compliance package covers every filing requirement, deadline, fee schedule, penalty structure, and step-by-step instructions specific to Tennessee businesses.

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