2026 Tennessee State Tax Deadlines

Tennessee business tax deadlines for 2026

Excise & Franchise Tax deadlines and requirements

C Corporations and certain other business entities in Tennessee must file and pay the Excise & Franchise Tax by April 15, 2027.

Filing requirements include:

1. Complete Form FAE170 (Business Tax Return)
2. File via TNTAP (Tennessee Taxpayer Access Point)
3. Payment must be made by April 15, 2027
4. Electronic filing is required for most business entities

Extension to file taxes in Tennessee for 2026

The Extension Deadline for Tennessee business tax returns is October 15, 2027. Form FAE170EXT is required for extensions; payment is still due April 15, 2027.

Tennessee Business Tax Structure

Tennessee imposes two central business taxes:

• Excise Tax: 6.5% on net earnings
• Franchise Tax: 0.25% on net worth (with minimum amounts)

Pass-through entities

Tennessee does not impose a separate entity-level pass-through tax on S Corporations and Partnerships. These entities file federal returns only, though they may be subject to other Tennessee business taxes depending on their structure and activities.

Tennessee Individual tax considerations for 2026

Hall Income Tax Phased Out

The Hall Income Tax on interest and dividends has been completely phased out for the tax year 2026. No Individual income tax returns are required for Tennessee residents.

No Individual Income Tax Returns Required

Tennessee Individuals enjoy the benefit of:

• No state Individual income tax on any type of income
• No Hall Income Tax on interest and dividends (phased out)
• Federal tax obligations remain unchanged
• Local property taxes (administered locally)
• State sales tax on purchases and transactions

Sales & Use Tax Considerations

While there is no Individual income tax, Tennessee imposes sales and use tax:

• Sales tax: varies by jurisdiction, typically 7% to 9.75%
• Use tax: required on out-of-state purchases
• Local jurisdictions add additional sales tax
• Special rates for specific industries and activities

What Tennessee tax professionals need to know

Tennessee's unique tax environment creates specific planning opportunities and compliance considerations for tax professionals working with Tennessee clients.

Electronic filing requirements

Tennessee has implemented electronic filing systems for business taxpayers:

• C Corporations must file electronically through TNTAP
• Business tax returns require electronic filing for most entities
• Professional preparers must use approved systems
• Electronic payment is required for business taxes

Unique Tennessee tax features for 2026

Tennessee offers several distinctive tax features, including:

• No broad-based Individual income tax on any type of income
• Excise tax rate of 6.5% on business net earnings
• Franchise tax rate of 0.25% on business net worth
• No local income tax—Tennessee prohibits local income taxes

Business Tax Structure

Tennessee's business tax system includes:

• Excise Tax: Based on net earnings from business activities
• Franchise Tax: Based on the net worth of the business
• Minimum tax amounts apply for both taxes
• Combined filing and payment system

Residency Planning Advantages

Tennessee's tax structure makes it attractive for:

• High-income Individuals seeking to minimize state income tax
• Retirees with significant investment income (no Hall Tax)
• Business owners seeking a competitive tax environment
• Individuals with substantial interest and dividend income

Business-Friendly Environment

Tennessee offers advantages for business formation and operations:

• No state Corporate income tax (replaced by excise and franchise taxes)
• Competitive business tax rates
• Various economic development incentives
• Right-to-work state benefits

Manufacturing and Industrial Focus

Tennessee's significant manufacturing base creates unique considerations:

• Manufacturing equipment sales tax exemptions
• Industrial development incentives
• Automotive industry presence
• Advanced manufacturing programs

Music and Entertainment Industry

Tennessee's entertainment industry, particularly in Nashville, has special considerations:

• Music industry tax provisions
• Entertainment venue incentives
• Tourism promotion benefits
• Creative industry development programs

Healthcare and Life Sciences

Tennessee's growing healthcare sector:

• Healthcare facility incentives
• Life sciences development programs
• Medical device manufacturing benefits
• Healthcare workforce development

Agriculture and Rural Development

Tennessee supports agricultural development:

• Agricultural equipment sales tax exemptions
• Farm operation considerations
• Rural development incentives
• Agricultural processing programs

Tourism and Hospitality

Tennessee's significant tourism industry:

• Tourism promotion taxes
• Resort and hospitality tax provisions
• Music City and cultural tourism
• Great Smoky Mountains tourism

Multi-State Tax Planning

Tennessee residents with income from other states must consider:

• Other states' tax filing requirements for nonresidents
• Credit calculations in other states (limited benefit due to no TN income tax)
• Potential state tax advantages of Tennessee residency
• Business income allocation issues

Business incentives and credits

Tennessee provides various business tax incentives:

• Job Tax Credit
• Investment Tax Credit
• Research and Development Credit
• Industrial Machinery Tax Credit
• FastTrack Infrastructure Development Program

Technology and Innovation

Tennessee emphasizes technology development:

• Research and development tax credits
• Technology startup incentives
• University research Partnerships
• Innovation and entrepreneurship programs

Energy and Utilities

Tennessee's energy sector:

• TVA (Tennessee Valley Authority) considerations
• Renewable energy incentives
• Utility infrastructure development
• Energy efficiency programs

Transportation and Logistics

Tennessee's central location creates logistics advantages:

• Transportation and warehousing incentives
• Distribution center benefits
• Interstate commerce considerations
• S Corporations logistics operations

Retirement income considerations

Tennessee provides favorable retirement income treatment:

• Military retirement pay may be exempt from Tennessee state income tax
• Social Security benefits are generally exempt from the Tennessee state income tax
• Pension income considerations for residents
• Senior citizen property tax benefits

Professional tax guidance

Even without Individual income tax, complex multi-state situations and business tax requirements may require professional attention. Consulting with qualified tax professionals through an accounting firm directory can help ensure compliance and identify available tax-saving opportunities.

Sources

• Tennessee Department of Revenue

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