How to Get a Tennessee Business License

Do you need a business license in Tennessee?

Regardless of the type of business you intend to operate in Tennessee, there’s a good chance you’ll need to obtain a business license to conduct business legally, either for business tax purposes or for compliance reasons. Statewide licensing requirements are based on net income, and other industry-specific licenses may be required by local and federal agencies for certain businesses.

Tennessee state 

All businesses based in Tennessee with gross business receipts over $3,000 must apply for a state business license to operate legally. Tennessee state business licenses are overseen by the Tennessee Department of Revenue and are closely associated with registration for the state-administered business tax through the TNDOR.

Any business reporting between $3,000 and $100,000 in business gross receipts for the year or out-of-state contractors operating in Tennessee are required to secure a minimal activity license with the county clerk’s office for the county in which the business is located. Larger businesses grossing more than $100,000 in a year, along with non-contractor out-of-state businesses, are required to register a business tax account and obtain a standard business license through their local regulatory agency, which may be a county or municipal clerk depending on the business’ location.

Industry-specific

Certain industries are subject to more licensing requirements than others in Tennessee. Industry-specific licenses are required for many businesses based on the type of products and services they offer to customers, and these industries are overseen by an assortment of federal, state, and local regulatory boards and agencies.

Companies working in fields like insurance, land surveying, architecture, and engineering are subject to additional licensing requirements when operating in Tennessee. You can see a full list of industry-specific licensing requirements on the TNDOR licensing and regulations webpage.

Federal 

Many Tennessee businesses regulated by the industry-specific licensure requirements at the state level will also need to seek licenses from the federal government. There is some overlap between the industries regulated at the state level in Tennessee and those regulated by the federal government, but new business owners should be sure to double check with relevant federal agencies to confirm all licensing requirements are met before they begin operating.

Businesses regulated by the federal government include those involved in the production and sale of alcoholic beverages, fishing businesses, broadcasting organizations, and agricultural enterprises. A full list of federally regulated industries can be found on the U.S. Small Business Administration’s licenses and permits website.

How to get a business license in Tennessee in 5 steps

Securing a business license in Tennessee is a multi-step process, and requires a thorough examination of your business, what products and services you intend to offer, and how your business will be structured.

Step 1: Form your business

Before you apply for your Tennessee business licenses, it’s important to finalize some important organizational details about your business. Choosing between a limited liability company and a corporation (or some other type of business structure) is a key step in the process of starting a new business and should be completed before moving forward with the licensing process.

Details like your business name, executive officers, and any other information that will be included in your formal foundational business documents should be finalized at this point too, as they will be referenced throughout the process of applying for state and federal business licenses.

To formally register your business, you will need to file the necessary documents with the Tennessee Secretary of State.

Step 2: Collect important financial information

Tennessee’s business licenses are associated with the state business tax, so you’ll need to understand how your business will file taxes. This includes registering for the state business tax, as well as securing an employer identification number through the Internal Revenue Service if you intend to hire employees for your business.

This is also a good time to identify any other names by which your business might operate and file a “doing business as,” or DBA, for those alternate names.

Step 3: Register for a state business license

Which Tennessee business license you’re required to hold, if any, is dependent on gross receipts for your business.

Businesses reporting between $3,000 and $100,000 in gross receipts must apply for a minimal activity license directly through their local county or city clerk. The minimal activity license includes a $15 yearly fee which must be paid at the time of application. Businesses earning less than $3,000 a year may still apply for this type of business license, but are not required to do so.

Larger businesses reporting more than $100,000 in gross receipts must register a business tax account with the TNDOR, and will be issued a standard business license as part of the registration for and payment for the tax. In doing so, the business’ standard license will be automatically updated with the local county or municipal clerk’s office.

Step 4: Identify state occupational licenses

Industry-specific licenses, sometimes referred to as occupational licenses, are required for many types of businesses in Tennessee. Once your business has registered for a minimal activity license or standard business licenses, it’s important to check with the TNDOR to ensure you have all the necessary occupational licenses as well.

These specific licenses are overseen by a number of regulatory boards at the state level, and each has its own unique requirements. A full list of regulatory boards is available on the TNDOR website, and further questions about occupational licenses can often be addressed either by your local clerk’s office or through the contact information provided on the state website.

Step 5: Check for federal licenses

As with state occupational licenses, the federal government oversees licensure of businesses in certain industries. These federal licenses are distinct from state licenses and typically carry additional regulations and fees with them. Federal licenses are issued and maintained by the U.S. Small Business Administration.

After getting your Tennessee business license

Regardless of whether your business applies for a minimal activity license or a standard business license, there are certain rules that must be followed after approval for the license. 

Upon receipt of your license approval, you must display it prominently in your business’ location before you can legally begin operating. The license must remain visible in the business for as long as it remains valid and the organization is transacting business.

Because business licenses are tied to payment of business taxes in Tennessee, renewal is relatively straightforward. When a business files a business tax return for the year, the license is renewed automatically under the assumption that there have been no substantial changes to the structure or operations of the business. Any changes that might affect the type of license issued to the business will also change the way taxes are paid, ensuring the license remains up-to-date and accurate.

If your business requires an additional industry-specific license from either the state or federal government, it’s a good idea to check with the licensing authority to determine if there are additional yearly requirements for keeping your licenses in good standing.

Getting an TN business license the easy way

Navigating the various regulatory bodies involved in securing a Tennessee business license can be challenging, and following the process incorrectly can carry serious complications for your business. LegalZoom offers a comprehensive business licensing and permit service that takes the guesswork out of applying for and maintaining the licenses your business needs, allowing you to focus on your business and your customers.

FAQs

What should I do before getting a business license?

Generally speaking, you should plan to have the organizational and administrative elements of your business in order before applying for your business license. This includes choosing a business name and structure, as well as drafting important documents like your business formation document. While there may be details left to iron out after securing a business license, you should aim to be as ready to start operating as possible before filing an application.

How much is a business license in Tennessee?

A Tennessee business license costs $15 each year, regardless of whether your business requires a minimal activity license or a standard business license. Other, industry-specific licenses may carry additional fees which vary from license to license.

How long does it take to get a business license in Tennessee?

Securing a business license in Tennessee is relatively fast, with wait times rarely exceeding 10 days through the TNDOR. Additional licenses may take longer, depending on your industry and the regulatory body responsible for overseeing your occupational licenses.