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Tennessee
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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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.