BUSINESS TAX NOTICE (May 2023)
Filing Threshold Increases to $100,000
The Tennessee Works Tax Act (the “Act”), Public Chapter 377 (2023), increases the business tax filing threshold from $10,000 to $100,000 per jurisdiction. Therefore, taxpayers with less than $100,000 in annual gross receipts are not required to file an annual business tax return.
Contractor “Deemed Location” Threshold Increases to $100,000
The Act also increases the gross sales threshold for contractors who perform contracts in Tennessee from $50,000 to $100,000. These contractors will only be considered to have established a “deemed location” in a given jurisdiction if their annual gross receipts are more than $100,000.
* These changes apply to tax years ending on or after December 31, 2023.
LICENSE REQUIREMENTS FOR NEW AND EXISTING BUSINESSES
Annual Gross Sales/Receipts:
$0 - $3,000: No business license is required.
$3,001 - $99,999: A minimal activity license is required. The minimal activity license is issued by the county clerk's office and does not require a tax return to be filed. The license must be renewed through the county clerk's office annually based on the fiscal year of the business.
$100,000 or more: A standard business license is required. Business taxes must be remitted annually based on the fiscal year of the business. Standard business license holders must create an account with the State of Tennessee, Department of Revenue, prior to filing a business tax return electronically. It is critical that you do this as soon as possible and do not wait until the due date of your return, as this could delay processing.
NOTE: A standard business license may be obtained by request for any business, regardless of gross sales. Businesses choosing to have a standard business license must file a business tax return with the Department of Revenue and remit tax for that location.
For additional information regarding business taxes, click here to visit the Department of Revenue's website. For assistance by phone, the Department may be contacted at 1-800-342-1003 (toll free) or (615) 253-0600.
- Business License Applications are filed with the Montgomery County Clerk’s Office. Information regarding exempt businesses is contained in TCA § 67-4-708.
- If business ownership is a Partnership, Limited Liability Company, Corporation, or Estate/Trust, a Federal Employer ID Number (FEIN) must be obtained from the IRS prior to applying for a business license.
- The application fee is $15.00 for the initial business license (minimal activity or standard).
- If submitting your application by mail, a $15.00 check or money order, made payable to Montgomery County Clerk, must be included.
- If you perform business within the city limits, you may also be required to obtain a business license from the City of Clarksville. For further information, contact the City of Clarksville, Department of Finance and Revenue office at (931) 645-7435.
- The Montgomery County Clerk’s Office is the issuing agency for transient vendors and owners, managers, operators, or promoters of antique malls, flea markets, craft shows, antique shows, gun shows, and auto shows.
- Need to change, add, or update information on your business tax account? Please complete and submit an account change form. The fee for an updated license is $5.00. If a business is changing owners, type of ownership (i.e., sole proprietor, LLC, Corporation, etc.), or FEIN, please contact our office for additional information.
- Is it time to renew your business license?
- The annual renewal fee for a minimal activity license is $15.00. Please visit the county clerk's office to remit payment and obtain your new license.
- To renew your standard business license, business taxes must be paid through the Tennessee Department of Revenue. Once notification is received, the Montgomery County Clerk’s Office will mail qualifying businesses their renewed business license.
How to obtain:
- Federal Employee ID# (FEIN) - Contact the IRS at 800-829-1040 or online at: www.irs.gov
- Tennessee Sales Tax # - Contact the TN Department of Revenue at 800-342-1003 or register online here.
- LLC - Contact the Secretary of State at 615-741-3276 or visit their website.
- Small Business Information - Contact Tennessee Small Business Development Center (TSBDC) at www.tsbdc.org.