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Trying to Start a Business in Tennessee

March 16, 2012, 11:42 am

As I wrote previously, I am entering business in Tennessee, trying to reopen some closed TVA campgrounds.  I was initially pissed off that Tennessee is one of the few states that double taxes S-corp earnings.  I expect this kind of BS in California, but I keep finding more Tennessee taxes I have to pay.  Here is what I have so far:

  • Pay annual Secretary of State registration fee (Fixed $)
  • Must collect state sales tax (% of revenue)
  • Must collect county sales tax (% of revenue)
  • Must collect a county lodging tax (% of lodging revenue)
  • Pay state Franchise tax (% of net worth)
  • Pay state Excise tax (% of corporate earnings, even for S-corp)
  • Pay something called a county business tax (% of revenues)
  • Pay annual registration fee for county business tax (fixed $)
  • Withhold employee state income taxes (% of wages)
  • Pay state unemployment taxes (% of wages)
  • Pay state individual income tax (% of pass-through corporate earnings)
  • Pay county property tax (% of assessed asset value)

I am sure I am missing a few.  Except for #2 and #3 which are collected together, every single one of these requires a separate registration and separate monthly or annual filing.

Tags: , , ,
Category: Taxes
  • elambend

    Do you have to put up a sales tax bond?

  • Anna

    Oh, great.

    (removes Tennessee from list of potential states to move to from California... rapidly running out of states... )

  • Ted Rado

    The arguments in favor of less government continue to grow exponentially. A deserted island sounds better and better as a place to live.

  • Terry

    I thought Tennessee had no state individual income tax except on interest and dividends...so there should be no withholding from wages.

  • Daniel LaReaux

    I'm running into the same type of thing here in Utah. All I want to do is sell and make some gourmet caramel corn and it's a nightmarish maze of requirements, fees and regulations. Tonight I start productions but I have to do it alone because for anyone to help me they have to have passed a food handlers test. (even if I only have them washing dishes)

  • Max Lybbert

    To add insult to injury, I believe that if you call the state department of revenue they will refuse to tell you all the taxes you could be on the hook for. I'm not sure what the official reason they'd cite, but the unofficial reason is that they're not sure they'd remember all of them.

  • me

    Time to raise my favorite topic: how positively impactful do y'all think simplifying the tax code to one simple percentage being collected from everyone without any exemptions would be? ;)

  • Ted Rado

    Me:

    I asked the same question of my son who works for the IRS. Why don't the feds, state, and locals get together and figure out a total tax system? Individula could just enter heir basic data, and a computer would figure out their total tax. This could then be divided up by the various governments. It would be simple and save huge amounts of paperwork. He had no answer.

  • TXJim

    Max - you are correct. When I started my first (and only) store front business, I was worried I would overlook something so I asked my tax dept for a worst case scenario list of taxes and regs I may have to comply with. I never got a straight answer. Some laws/regs they are evidently more familiar with, depending on the incentives. Although they could never tell me if I was missing out on any kind of tax compliance, 2 months after I closed the business they definitely knew how to locate my business checking account. They helped themselves to 1500 bucks without a letter or a phone call. The only way I knew it was the state was my bank told me who took the money. Eventually I found out why - they estimated my tax liability and were "just saving me the paperwork." It took me a year to get my money back. Jerks.

    BTW, I learned later the hard way I payed waaay too much to register my LLC in TX (~800). I should have gone out of state. Live and learn.

  • JKB

    Yeah, Tennessee only has the "rich widow" income tax enacted in 1929 so those terrible people who built their own retirement by buying into dividend paying companies had to pay. As far as I know, they don't require withholding but I suppose they have the requirement on business for those taxpayers who need it.

    The real question is even at each level, why can't they normalize the requirements to make things easier for business compliance. I suppose it is because if it was all one stop shopping the burden would be apparent.

  • Paul Dubuc

    "Pay annual registration fee for county business tax (fixed $)"

    A tax enforcement tax! How else to cover the cost of depositing checks and reviewing tax returns!

    Coming soon: The County Business Tax Registration License Fee (fixed $), whereby the review of tax registrations and deposit of the fee is funded.

    I guess I welcome the transparency, but sheesh.

    I take it you've seen this, Warren:

    http://reason.com/archives/2012/03/16/how-budget-cutbacks-are-helping-californ

    Wondering how you didn't get sourced on this. What does a left-libertarian expert on private operation of public park facilities have to do to get a quote in a left-libertarian publication's story on private operation of public park facilities?

  • http://ryanboots.com Ryan

    Really? You should ping Glenn Reynolds on this. I would have expected this sort of thing out of a blue Midwest state, but not Tennessee.

  • Wan Tai Fu

    Years ago Moneysworth Magazine sent identical sets of income data to 5 different IRS field offices. At that time if your income were under a certain threshold IRS would compute your tax and notify your of your payment or of your refund. You might have already guessed the result; no return received the same amount of tax due or refund owed. In many instances one office would compute tax due while others would offer refunds -- on the very same data set!

    With all the taxing authorities I have encountered in my 70 years I have found the right hand to take what the left hand might seem to give.

    I gave up and retired overseas - and I am much better off as a result of the move!