Business License & Tax
New Business & New License Requirements - Download
You must choose between a minimal activity license (gross sales of $3,001 to $9,999) or a standard business license (gross sales over $10,000).
The following information is designed to inform you of Business Tax in general. It is not intended to completely address the lengthy and complex business tax laws and regulations.
Business Tax is administered by the Tennessee Department of Revenue. Business Tax is classified as a privilege tax for the right to do business within the counties and cities of Tennessee.
WHO IS REQUIRED TO HAVE A LICENSE?
The owners or operators of all for-profit businesses, except manufacturers and specific business professionals, must pay the local business tax for each place of business located in the county and /or the city which collects the business tax. If both the county and the city levy the tax, the business may be liable for both.
Effective December 1st, 2013, when registering a new business, taxpayers will need to estimate their expected gross sales on an annual basis. This amount determines which type of license is appropriate. If taxpayers estimate they will make under $3,000 they are not required to obtain a business license, but will need to sign an affidavit with the County Clerk's office. Anyone estimating their gross receipts between $3,001 and $9,999 will now obtain a Minimal Activity License, which costs $15.00 a year and expires at the end of each year. The taxpayer can either let it expire or get a new one each year with the Clerk's office. The taxpayer would need to obtain a new minimal activity license before May 15th of each year. Any taxpayer currently holding a standard business license that would like to change to the minimal activity license will need to file a final return for their current business license with the Tennessee Department of Revenue. All taxpayers estimating gross receipts of $10,000 and over will file and pay taxes electronically to the Tennessee Department of Revenue.
HOW DO I OBTAIN A BUSINESS LICENSE?
When applying for a business tax license, you must provide the following:
- Business name, business address, business telephone number
- Owner's name(s), home address, home telephone number, social security number
- Name of person(s) or company owning the personal property (equipment, etc.)
- Copy of owner(s) driver's license
- Signature of each owner
You are required to provide the total gross sales and/or revenues for items sold and services rendered, apply the appropriate tax rate(s) and file electronically to the Dept. of Revenue.
Business tax returns must be electronically filed and payments remitted electronically to the Department of Revenue beginning January 1, 2014. Paper returns and checks will not be allowed. The Department of Revenue will no longer mail business tax returns to taxpayers after this date. Taxpayers not currently registered for electronic filing should register immediately in order to obtain a user name and password. Taxpayers should call 866-368-6374 or 615-253-0704 for questions regarding registering (It is not possible to register for electronic filing and then immediately file a tax return that is due; pre-registration is mandatory.)
All returns as of January 1, 2015, will be on a fiscal year of January through December and must be filed before April 15th of each year. Taxpayers can contact the Tennessee Department of Revenue at www.TN.gov/revenue or 800-342-1003/615-253-0600.
APPLICATION FOR NEW BUSINESS LICENSE AND THE LICENSE AND TAX REPORT
The "Application for New Business Tax License" form is available for download and/or printing. You must choose between minimal activity license and standard business license.
TRANSIENT VENDOR LICENSE
A person/business selling or offering to sell new merchandise to the public on temporary premises and does not have a permanent, fixed location in Tennessee where the business is conducted is considered a transient vendor. A transient vendor can be both a Tennessee resident or an out of Tennessee resident. A transient vendor is required to obtain a 14-day permit from this office to conduct business in this county and/or city. If the permit expires prior to the scheduled ending date, then a new permit must be obtained for an additional 14 days.
HELP DESK FOR FILING AND RENEWING
Taxpayers can contact the Tennessee Department of Revenue at www.TN.gov/Revenue.
WHY SOME BUSINESSES ARE AUDITED
All businesses subject to business tax must keep and preserve records showing the gross sales and any other books of account needed to determine the amount of tax due. All such books and records shall be open to inspection at all reasonable hours by this office, and are subject to an audit. Audits are performed to ensure the proper payment of business tax, as well as, the understanding of the tax by the taxpayers. Audit candidates are normally chosen randomly. However, if several businesses in a specific industry do not have an understanding of the law, audits may be performed primarily to assist. By reviewing the records and obtaining an understanding of a specific business, the audit results will determine if the gross sales reported are accurate; the proper deductions are taken; the wholesale and/or retail rate should be applied/ all the appropriate credits are applied; the business is required to pay the business tax; as well as, other findings. Some audits may result in a finding of overpayment of the business tax and a refund may be due.
ANSWERS TO FREQUENTLY ASKED QUESTIONS
· The fee for a Sevier County business license is $15.00.
· Effective January 1, 2014, the report of gross sales, payment of taxes, a renewal of licenses must be made electronically to the Dept. of Revenue. Paper returns and checks will not be allowed. The Dept. of Revenue will no longer mail business tax returns to taxpayers.
· Both penalty and interest are charged on delinquent returns.
· Final business tax returns are due within 15 days of termination, sale or closing of a business.
· To close minimal activity licenses, contact the Sevier County Clerk’s office at 865-453-5502.
· If a business tax license is obtained yet the business never started, please notify this office if your business changes or business mailing address changes.
o Out-of-state contractors – if contract is under $50,000, file with Dept. of Revenue only. If contract is over $50,000, you are required to have a county business license as well.
o Subcontractor deductions are only allowed if contractor maintains a copy of their license in his files. You cannot deduct subcontractors with a minimal activity license.