4 ms·

Watch out - Tennessee has an 6.5% excise tax on LLCs which is essentially an income tax if you're self employed. https://www.tn.gov/revenue/taxes/franchise---e

by pbnjay 8y ago

Watch out - Tennessee has an 6.5% excise tax on LLCs which is essentially an income tax if you're self employed. https://www.tn.gov/revenue/taxes/franchise---excise-tax.html https://www.tn.gov/revenue/taxes/franchise---excise-tax.html

nodesocket 8y ago
-- Update: Buried deep in the depths of TN website and using the most confusing and counterintuitive language ever assembled is this article: https://revenue.support.tn.gov/hc/en-us/articles/204647155-When-is-a-Single-Member-Limited-Liability-Company-SMLLC-required-to-file-a-franchise-excise-tax-return-in-Tennessee- https://revenue.support.tn.gov/hc/en-us/articles/204647155-W... Essentially it says if I am a disregarded entity for federal tax purposes I am exempt from both franchise and exercise taxes.
- nodesocket 8y ago
  Ok, I am even more confused after reading this: https://revenue.support.tn.gov/hc/en-us/article_attachments/201984685/Important_Notice_13-16.pdf?mobile_site=true https://revenue.support.tn.gov/hc/en-us/article_attachments/... How do you even have a single member LLC that is a disregarded entity where the single entity is a corporation? Huh? That seems to indicate I am responsible for these taxes?
  - JumpCrisscross 8y ago
    > How do you even have a single member LLC that is a disregarded entity where the single entity is a corporation? LLC stands for "limited liability company," not corporation [1]. When one says "corporation" in a legal sense, it is typically understood to exclude LLCs. (That said, LLCs can elect to be treated as corporations for tax purposes.) [1] https://en.wikipedia.org/wiki/Limited_liability_company https://en.wikipedia.org/wiki/Limited_liability_company
  - jknightco 8y ago
    LLC members can be other LLCs or corporations.
  - pbnjay 8y ago
    I'm not an accountant/lawyer, but yeah my reading is if you're a sole proprietor, disregarded for IRS purposes (e.g. you use Schedule C)... then yeah you owe TN this tax. FWIW, I don't live in TN, but I used to. And I've done sole prop LLC's in a couple states now so I looked into moving back to TN and found this info.
    - nodesocket 8y ago
      That is also how I read it, but I reached out to an accountant today and he said no. His response was: > Since you are an LLC, and you are operating an active business, you will need to file a Franchise and Excise tax return, but you will be exempt from the Excise portion of the tax. No idea how it works? I'm thoroughly confused.

by pbnjay 8y ago

nodesocket 8y ago

-- Update: Buried deep in the depths of TN website and using the most confusing and counterintuitive language ever assembled is this article: https://revenue.support.tn.gov/hc/en-us/articles/204647155-When-is-a-Single-Member-Limited-Liability-Company-SMLLC-required-to-file-a-franchise-excise-tax-return-in-Tennessee- https://revenue.support.tn.gov/hc/en-us/articles/204647155-W... Essentially it says if I am a disregarded entity for federal tax purposes I am exempt from both franchise and exercise taxes.

nodesocket 8y ago
Ok, I am even more confused after reading this: https://revenue.support.tn.gov/hc/en-us/article_attachments/201984685/Important_Notice_13-16.pdf?mobile_site=true https://revenue.support.tn.gov/hc/en-us/article_attachments/... How do you even have a single member LLC that is a disregarded entity where the single entity is a corporation? Huh? That seems to indicate I am responsible for these taxes?
- JumpCrisscross 8y ago
  > How do you even have a single member LLC that is a disregarded entity where the single entity is a corporation? LLC stands for "limited liability company," not corporation [1]. When one says "corporation" in a legal sense, it is typically understood to exclude LLCs. (That said, LLCs can elect to be treated as corporations for tax purposes.) [1] https://en.wikipedia.org/wiki/Limited_liability_company https://en.wikipedia.org/wiki/Limited_liability_company
- jknightco 8y ago
  LLC members can be other LLCs or corporations.
- pbnjay 8y ago
  I'm not an accountant/lawyer, but yeah my reading is if you're a sole proprietor, disregarded for IRS purposes (e.g. you use Schedule C)... then yeah you owe TN this tax. FWIW, I don't live in TN, but I used to. And I've done sole prop LLC's in a couple states now so I looked into moving back to TN and found this info.
  - nodesocket 8y ago
    That is also how I read it, but I reached out to an accountant today and he said no. His response was: > Since you are an LLC, and you are operating an active business, you will need to file a Franchise and Excise tax return, but you will be exempt from the Excise portion of the tax. No idea how it works? I'm thoroughly confused.