Memphis Franchise Tax Guide for Businesses

Taxation and Finance Tennessee 4 Minutes Read · published February 08, 2026 Flag of Tennessee

Businesses operating in Memphis, Tennessee must understand both state franchise and excise taxes and any city business tax or licensing requirements that apply locally. This guide explains who is liable, the state tax rates and filing channels, how the City of Memphis administers local business taxation and licensing, and the practical steps to register, file, pay, and appeal assessments.

Many Memphis businesses are subject to Tennessee franchise and excise taxes even if they also hold local business licenses.

Overview of Franchise & Excise Taxes

Tennessee imposes a franchise tax and an excise tax that apply to businesses doing business in the state; the Tennessee Department of Revenue administers these taxes and provides filing and registration guidance [1]. The City of Memphis separately requires business tax registration or licensing for certain activities and collects local business tax or fees through its Finance Department [2].

Who Must File

  • Corporations, LLCs, and other entities with taxable net earnings or net worth doing business in Tennessee.
  • Out-of-state entities with apportioned business activity in Tennessee.
  • Businesses operating in Memphis that meet local business tax or licensing thresholds must register with the City of Memphis Finance or Business Tax Division.

Key State Rates and Filing Channels

  • Tennessee excise tax: 6.5% of net earnings (state rate). [1]
  • Tennessee franchise tax: 0.25% of the greater of net worth or real and tangible property in Tennessee (state rate). [1]
  • State registration and electronic filing are available through the Tennessee Department of Revenue; the department directs taxpayers to its filing portal and guidance pages [1].

Penalties & Enforcement

The Tennessee Department of Revenue enforces franchise and excise tax collection for state taxes; enforcement tools commonly used at the state level include assessments, interest, and collection actions. Specific monetary penalty amounts for late filing or failure to pay are not specified on the cited Tennessee Department of Revenue page and should be confirmed on the department’s penalties and collections pages [1].

  • Enforcer: Tennessee Department of Revenue for state franchise and excise taxes; City of Memphis Finance/Business Tax Division for local business tax and licensing enforcement [2].
  • Escalation: first notices, assessed interest, administrative assessments, then collection actions and potential litigation; exact escalation schedules and monetary fine amounts are not specified on the cited pages.
  • Non-monetary sanctions: administrative orders, liens, and collection referrals to the courts or private collectors may be used; specific non-monetary remedies vary by enforcing agency.
  • Inspections and complaints: complaints about local licensing or business tax compliance are handled by the City of Memphis Finance or Code Enforcement offices; see local ordinance and department contacts [3].
  • Appeals: taxpayers may follow the appeal and protest procedures published by the Tennessee Department of Revenue for state taxes; precise time limits for filing appeals or protests are not specified on the cited department page and should be confirmed directly with the department [1].

Applications & Forms

The Tennessee Department of Revenue provides electronic registration and filing via its online portals; specific franchise and excise returns and instructions are available on the department site [1]. The City of Memphis posts business tax and licensing forms or web registration through its Finance or Business Tax Division; if no city form is required, the city page indicates how to register or renew online [2].

Use the Tennessee online filing portal for state franchise and excise returns to avoid processing delays.

How-To

  1. Determine if you are subject to Tennessee franchise and excise taxes and whether your Memphis operations require local business tax registration.
  2. Register with the Tennessee Department of Revenue and set up electronic filing (follow the department guidance linked below).
  3. Register for any City of Memphis business tax or licensing requirements with the City Finance or Business Tax Division.
  4. Maintain records of earnings, net worth, and apportionment factors to support state and local returns.
  5. File and pay state taxes by the due dates and pay any local business taxes or permit fees required by Memphis.
  6. If you receive an assessment, follow the Tennessee Department of Revenue protest and appeal procedures or the City of Memphis appeal route for local notices.

FAQ

Do businesses in Memphis pay franchise tax?
Yes. Franchise and excise taxes are state taxes administered by the Tennessee Department of Revenue and apply to businesses doing business in Tennessee; local Memphis business taxes may also apply depending on activity and licensing requirements [1] [2].
Where do I file my franchise and excise tax return?
File state franchise and excise returns using the Tennessee Department of Revenue’s filing channels as described on its website [1].
How do I register my business with the City of Memphis?
Register or obtain local business licenses and pay any City of Memphis business tax through the city’s Finance or Business Tax Division pages and online registration portals [2].

Key Takeaways

  • Tennessee franchise and excise taxes apply statewide; Memphis businesses should also check city business tax and licensing rules.
  • Use Tennessee Department of Revenue online filing and register with the City of Memphis Finance/Business Tax Division where required.

Help and Support / Resources

  1. [1] Tennessee Department of Revenue - Franchise and Excise Taxes
  2. [2] City of Memphis - Business Tax Division
  3. [3] City of Memphis Code of Ordinances (Municode)

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