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Kentuckycorporate tax inTennessee
Moderate — top rate 5–7.99%

Tennessee

Top Rate
6.5%
Rate Structure
Flat
Franchise Tax
Yes
Gross Receipts Tax
No
S-Corp Recognized
No

Corporate Income Tax Rate at a Glance

Tennessee's top corporate income tax rate is 6.5%, applied as a flat rate. This places Tennessee in the "Moderate (5–7.99%)" tier among U.S. states.

Rate Structure (Flat vs. Graduated)

6.5% flat Excise Tax on net earnings derived from business in Tennessee.

Franchise Tax / Annual Privilege Tax

Tennessee imposes a Franchise Tax in addition to the Excise Tax. As of 2024 reform, the franchise tax is 0.25% of the taxpayer's apportioned net worth, with a $100 minimum. The alternative property-based measure was eliminated for tax years ending on or after Jan 1, 2024.

S-Corp & Pass-Through Treatment

Tennessee taxes most LLCs, S-corps, and partnerships as separate entities under the Excise Tax (6.5%) and Franchise Tax (0.25%), regardless of federal pass-through classification, unless they qualify for an obligated-member entity (OME) exemption with general partnerships of natural persons. This is unlike most states.

Official State Revenue Department

For current corporate tax rules in Tennessee, consult the state's official source at https://tn.gov/revenue/. Rates and rules change annually — verify with a qualified tax professional before taking any action.

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Related guides

Tennessee Department of Revenue: https://tn.gov/revenue/
Law last updated: 2024Row last reviewed: May 7, 2026

Corporate income tax rates change frequently as states enact reform packages and phase-down schedules. Always verify current rates with the state's department of revenue and your tax advisor before making business decisions. This information is for educational purposes only and is not tax or legal advice.