Do I need an LLC?Tennessee LLC cost: year one and every year after
Short answer. For a solo operator in Tennessee, the state cost confirmed on official sites is $300 to form (the Articles of Organization) and then $400 a year: the $300 annual report to the Secretary of State plus the $100 minimum franchise tax. The surprise is the second part. Tennessee does not treat a single-member LLC as invisible for franchise and excise tax, so even an LLC with no revenue files its own return, and with profit it also owes 6.5% excise tax on net earnings. A sole proprietor does not owe that tax (not verified: the state manual could not be opened), which makes "Not yet" a very real answer here. An LLC formed in November 2026 pays $700 in its first 12 months. A registered agent is needed but has no price we could confirm. Forming in Wyoming instead costs more ($400 confirmed before any annual reports), because a Tennessee resident still registers in Tennessee for $300. City and county business taxes and Tennessee sales tax on software are not computed in the totals.
Informational only. Not legal or tax advice. Confirmed means read on an official government page on 2026-11-03. Estimates are shown apart and are never added to confirmed totals.
Tennessee LLC vs Wyoming LLC vs sole proprietor
| Path | Year one | Each year after |
|---|---|---|
| A. LLC in Tennessee | $300 confirmed ($300 Articles of Organization; add the $300 annual report and the $100 minimum franchise tax if their first deadlines fall within your first 12 months, for example $700 for an LLC formed in November) + Tennessee registered agent: no figure found, not included | $400 confirmed ($300 annual report + $100 minimum franchise tax, even with no revenue) + 6.5% excise tax on net earnings and franchise tax above the minimum if net worth exceeds $40,000: confirmed rates, not computed + Tennessee registered agent if you do not serve as your own: no figure found, not included |
| B. LLC in Wyoming + register in Tennessee | $400 confirmed ($100 Wyoming + $300 Tennessee certificate of authority) + Wyoming registered agent and Tennessee registered agent: no figures found, not included + the first Tennessee annual report and franchise tax return if their deadlines fall within your first 12 months (for example $800 for a November formation) | $460 confirmed ($60 Wyoming minimum annual report + $300 Tennessee annual report + $100 minimum franchise tax) + both registered agents, no figures found |
| C. Sole proprietor (baseline) | $0: free EIN from the IRS, separate bank account + a county or city business license may apply: not in the total | $0 in state formation and annual fees Franchise and excise tax: not owed by a sole proprietor, per the state manual excerpt (not verified) |
Not in any total above: a registered agent (no commercial price found), expedited processing (no fee found), 6.5% excise tax and any franchise tax above the minimum, your federal income and self-employment tax, bank fees, Tennessee sales tax on software or digital products (likely taxable, not verified, not computed), city and county business taxes and licenses (not covered), and any attorney or CPA time.
Tennessee LLC fees, line by line
| Fee | Amount | Status | Source |
|---|---|---|---|
| Tennessee Articles of Organization (Form SS-4270) | $300 | verified | Tennessee SOS: Business Forms & Fees. A per-member structure ($50 per member, $300 minimum, $3,000 maximum) appears in a search excerpt of the form that could not be opened; one member pays the $300 minimum either way. |
| Name reservation (Form SS-9425) | $20 | verified, optional, not in totals | Tennessee SOS |
| Expedited processing | no figure found | not verified, not in totals | Expedite fees were not found on a page read |
| Annual report (LLC) | $300 minimum, up to $3,000 (plus $50 per member over 6) | verified | Tennessee SOS FAQ |
| Annual report due date | April 1 for a calendar-year LLC | not verified | The Secretary of State annual report pages could not be read; the date comes from search-result excerpts. Confirm in TNCaB. |
| Late annual report fee | no figure found | not verified, not in totals | No late fee found on any page read |
| Reinstatement after administrative dissolution (Form SS-9410) | $70 | fee verified; when it applies not verified | Tennessee SOS. The dissolution wording comes from a search summary; back fees and penalties are not known. |
| Minimum franchise tax | $100 a year, active or inactive | verified | Tennessee Department of Revenue: Franchise and Excise Tax |
| Franchise tax rate | 0.25% of Tennessee net worth | verified, not computed | Department of Revenue: Due Dates and Tax Rates |
| Excise tax rate | 6.5% of Tennessee taxable income | verified, not computed | Department of Revenue: Due Dates and Tax Rates |
| Franchise and excise tax return due date | April 15 for a calendar-year LLC; seven-month extension | verified | Department of Revenue: Due Dates and Tax Rates |
| Single-member LLC owned by an individual | subject to franchise and excise tax | verified | Department of Revenue F&E-3: Disregarded Entities |
| Foreign LLC certificate of authority (Form SS-4233) | $300 | verified | Tennessee SOS |
| Penalty for transacting business before registering a foreign LLC | no figure found | not verified, not in totals | Not found on a page read; confirm with the Secretary of State |
| Change of registered agent or office (Form SS-4534) | $20 | verified, not in totals | Tennessee SOS |
| Tennessee registered agent | no figure | unresolved | The Articles name an agent and office; the requirement sentence was not read, and private companies set the price. |
| Newspaper publication | none found for LLCs | not verified | The formation pages could not be read; an absence is not proof |
| State business tax | only at $100,000 or more of gross receipts; minimum tax $22 | verified, not in totals | Department of Revenue: Business Tax. Applies to LLCs and sole proprietors alike. |
| Wyoming Articles of Organization | $100 | verified | Wyoming SOS fee schedule, effective July 1, 2026 |
| Wyoming annual report license tax | $60 minimum | verified | Same schedule: $60 or two-tenths of one mill on Wyoming assets, whichever is greater. |
| Wyoming registered agent | no figure | unresolved | Private companies set the price. Wyoming requires an agent (seen in a search excerpt of an SOS guide, not read in full). |
| EIN | $0 | verified | IRS: "You never have to pay a fee for an EIN." |
Why Wyoming does not help a Tennessee resident
A Tennessee-based LLC formed in Wyoming has to register in Tennessee ($300, Form SS-4233) before transacting business there (the requirement and the penalty for skipping it were not read on an official page). Once registered in Tennessee it is subject to the same franchise and excise tax and annual report as a Tennessee-formed LLC, and it pays Wyoming's $100 and $60 on top. For a solo operator the Wyoming route costs more than forming in Tennessee.
Tennessee taxes: what an LLC does and does not change
The IRS treats a single-member LLC as "disregarded as separate from its owner" for federal income tax: you report profit on Schedule C and pay self-employment tax as a sole proprietor would. Tennessee does not follow that rule for franchise and excise tax. Its Department of Revenue says entities disregarded for federal purposes "are not disregarded for F&E taxes except for limited liability companies whose single member (SMLLC) is a corporation" (F&E-3), so an LLC owned by an individual files its own Tennessee return. The minimum franchise tax is $100, "regardless of whether the company is active or inactive" (Department of Revenue). Beyond the minimum, franchise tax is 0.25% of net worth and excise tax is 6.5% of Tennessee taxable income (rates page). Tennessee is generally known to have no personal income tax, but we did not read a page that says so, so that is not verified. Federal estimated tax for 2026 is due April 15, June 15, September 15 and January 15, 2027 (Form 1040-ES). See the annual report page for both yearly filings.
What is different about forming in Tennessee: the tax on the LLC itself
Three Tennessee-specific points for a solo app or SaaS founder, each from a Tennessee government page read on 2026-11-03 unless labelled otherwise. Informational only, not legal or tax advice.
- The LLC itself is taxed, even with no income. The $100 minimum franchise tax is payable by any LLC registered through the Secretary of State, active or inactive, and a return is due each year. With net earnings the 6.5% excise tax applies on top, in addition to the owner's federal income tax. Sources: franchise and excise overview, rates and due dates, F&E-3.
- The ways out cost something too. The Department of Revenue lists exemptions (exempt entities, family-owned non-corporate entities). An LLC whose members are fully liable for its debts can apply for exemption on form FAE 183, but that gives up the liability protection that many people form an LLC for; a family-owned entity earning mostly passive income is a poor fit for an operating software business. This site does not recommend either; a CPA or attorney should confirm. The simplest comparison is to stay a sole proprietor, which is not subject to the tax (sole proprietor status is not verified; a sole proprietorship that holds itself out as an LLC can become subject).
- Business tax is a separate, higher bar. State and city business tax is a gross-receipts tax that applies at $100,000 or more of gross receipts, with a $22 minimum tax; a minimal activity license from the county or city clerk is needed above $3,000 and below $100,000, plus a $15 license registration fee. It applies to LLCs and sole proprietors alike and is not in any total. Sources: business tax, registration and licensing, rates.
Not verified and left out: Tennessee sales tax on software or SaaS (search excerpts say access to software is taxable and a remote seller must register above $100,000 of Tennessee sales; the notices could not be read, so check with the Department of Revenue before selling to Tennessee customers), a late fee for the annual report, and whether Tennessee's newspaper rules apply to LLCs.
What this Tennessee page doesn't tell you
Whether you need an LLC yet, which line of the table applies to you, your own dates (the annual report, the franchise and excise return, estimated taxes), or whether to ask a CPA about an S-corp. The calculator takes your answers and returns a verdict, your numbers and a dated checklist you can download as a PDF and calendar file.
Tennessee LLC questions
How much does it cost to form an LLC in Tennessee?
The confirmed state cost to form is $300, the Secretary of State fee for the Articles of Organization (Form SS-4270). A single-member LLC pays that minimum. The first $300 annual report and the first franchise and excise tax return (minimum franchise tax $100) fall due the year after you form, so an LLC formed in November 2026 pays $700 in the first 12 months. A registered agent is needed, but no commercial price was found, so none is included.
What does a Tennessee LLC cost every year?
$400 in confirmed state costs: the $300 minimum annual report to the Secretary of State plus the $100 minimum franchise tax, even for a single-member LLC with no revenue. If the LLC has net earnings it also owes 6.5% excise tax on them, and franchise tax is 0.25% of net worth when that comes to more than $100. Those amounts are not computed in the totals.
Does a single-member LLC owe Tennessee franchise and excise tax?
Yes. The Department of Revenue does not disregard a single-member LLC owned by an individual for franchise and excise tax, so the LLC files its own return and owes at least the $100 minimum franchise tax every year, active or not. A sole proprietor is not subject to it, according to a search excerpt of the Department's manual that we could not open, so treat that as not verified.
Is a Wyoming LLC cheaper for a Tennessee resident?
No. A Tennessee resident forming in Wyoming still registers the LLC in Tennessee for $300 (Form SS-4233), still files the Tennessee annual report and franchise and excise tax return, and also pays Wyoming's $100 formation fee and $60 minimum annual report. The confirmed total is $400 before any annual reports and $460 each year after.
Does Tennessee have a personal income tax?
Tennessee is generally known to have no tax on the wages or business income of individuals, but we did not read a Tennessee page that says so, so it is not verified. That does not remove the LLC-level excise tax of 6.5% on net earnings, which is Tennessee's tax on an LLC's profit.
Do I need an LLC in Tennessee yet?
Not necessarily. "Not yet" is a valid answer: a sole proprietor pays none of the state fees above, while an LLC owes $400 a year from the year after formation whatever it earns. Run the calculator for a verdict based on your own numbers.