A common misconception many Tennessee entrepreneurs hold is that they can simply open their doors and start running their business. As long as they pay their taxes and may even copyright or trademark the name, everything is covered. However, there is one important step that still needs to be done. Business owners may need to register their business and/or get a business license.
According to the Tennessee Department of Revenue, most businesses in the state need a license to operate. Here are some of the requirements to keep in mind:
- Regular businesses licenses for more than $10,000 in annual gross receipts
- Minimal activity business licenses if gross receipts are under $10,000
- City business licenses if in the city and generating more than $3,000 in gross receipts
The Tennesse state website also reminds owners that they need to register their business to pay taxes on business income. Thankfully, this tends to be easy to do as business owners can register online. Business license fees may cost as little as just $15. This is paid to the municipal clerk or the city every time an individual registers a new business.
An important note to keep in mind is that business taxes are due at the end of the fiscal year, but not directly afterward. Business owners have until the 15th of the fourth month to pay. Business owners should also keep federal taxes due in mind. These are usually due on the 15th day in the following month after a quarter ends. Failure to make these estimated tax payments may lead to penalties at year-end tax filing.
For more information about registering a business in Tennessee, give the TN DOR a call at (615) 253-0600. To learn more about tax obligations and payment schedules with the IRS, it is a good idea to reach out to that agency as well.