What Tennessee Small Businesses Need to Know About Taxes in 2023

As small business owners in Tennessee, we know that navigating the ever-changing tax landscape can be a daunting task. And with new tax laws set to take effect in 2023, it’s important to stay informed and prepared.

That’s why we’ve put together this guide on what you need to know about taxes in Tennessee for 2023. From sales tax collection requirements to changes in franchise and excise tax laws, there are several updates that could impact your business’s bottom line.

But don’t worry – we’ll break down each change and provide tips for staying ahead of the curve. So let’s dive in and make sure your business is ready for what lies ahead in terms of taxes in Tennessee.

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Overview of Changes to Tennessee’s Tax Laws in 2023

You’ll want to know that Tennessee’s tax laws are changing in 2023, so here’s what’s new.

As we approach 2023, Tennessee small businesses must stay informed about the tax landscape. It is crucial to understand not only tax regulations but also practical matters like how to register LLC in tennessee, ensuring compliance with the right legal structures.

As tax regulations evolve, self-employed individuals who operate small businesses in Tennessee should become familiar with the best tennessee LLC services for self-employed entrepreneurs before the end of the year.

In 2023, Tennessee small business owners should keep a keen eye on the state’s ever-evolving tax regulations. Staying informed about tennessee small business taxes can help ensure smooth financial operations and compliance with state requirements.

The state has revised its taxation implications for businesses, which will directly impact their compliance with regulations. These changes mainly deal with corporate income tax and franchise and excise taxes.

The biggest change is the adoption of a single sales factor apportionment method for calculating corporate income tax. This means that companies will now pay taxes based on the percentage of sales made within Tennessee, regardless of where they’re headquartered or where their property and payroll are located.

Additionally, the state has increased the minimum taxable threshold for franchise and excise taxes from $500,000 to $1 million.

These revisions have been introduced to help small businesses in Tennessee by simplifying their tax reporting requirements. However, it’s important for business owners to stay updated on these changes to ensure compliance with the new laws.

In the next section, we’ll discuss the sales tax collection requirements that small business owners should be aware of moving forward.

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Sales Tax Collection Requirements

As we continue our discussion on Tennessee’s tax laws in 2023, it’s important to note the updates regarding sales tax collection requirements.

Two key points that demand attention are changes to Marketplace Facilitator Laws and updates to Remote Seller Requirements. These changes reflect the state’s commitment to ensuring that businesses of all sizes remain compliant with Tennessee tax code.

Changes to Marketplace Facilitator Laws

Hey, small business owners in Tennessee! Did you know there are some exciting changes coming to the Marketplace Facilitator Laws? As of January 1st, 2023, marketplace facilitators will be responsible for collecting and remitting sales tax on behalf of their third-party sellers. This change is expected to have a significant impact on small businesses by reducing their tax compliance burden.

Here are four things you need to know about these changes:

  1. If you sell through a marketplace like Amazon or Etsy, the platform will now collect and remit sales tax on your behalf.
  2. You may still be responsible for filing state income taxes and other state-specific taxes.
  3. If you sell both online and in-person, make sure to keep track of which sales were made through marketplaces versus other channels.
  4. It’s important to stay up-to-date with any additional changes or clarifications as they become available.

With these updates to the Marketplace Facilitator Laws, it’s important for small businesses in Tennessee to stay informed and prepared for future changes.

Next up, we’ll discuss updates to remote seller requirements that could also affect your business’s tax obligations.

Updates to Remote Seller Requirements

If you sell products online, it’s crucial to stay informed about updates to remote seller requirements that could impact your tax obligations. Remote seller compliance refers to the responsibility of businesses located outside a state to collect and remit sales taxes, based on the amount of economic activity they have within that state.

As states continue to update their economic nexus thresholds, it’s important for small businesses to keep track of these changes in order to stay compliant with tax laws.

In Tennessee, remote sellers are required to collect and remit sales tax if they exceed certain economic nexus thresholds. The current threshold is $100,000 or more in gross revenue from sales into Tennessee during the previous 12-month period. Additionally, remote sellers must also collect local option sales taxes in jurisdictions where their customers reside.

Staying up-to-date with these requirements is essential for small business owners who want to avoid penalties and ensure compliance with Tennessee’s tax laws. With this in mind, let’s now turn our attention to changes coming soon concerning franchise and excise tax laws.

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Changes to Franchise and Excise Tax Laws

You’ll want to keep an eye on the changes happening with franchise and excise tax laws in Tennessee, as they could potentially impact your small business’s bottom line. Here are some key points to consider:

  • Franchise tax calculation will now be based on a single sales factor apportionment formula, which means that businesses with higher sales in Tennessee will pay more taxes.
  • Excise tax deductions have been limited for certain industries such as healthcare and financial services, making it important for businesses in these fields to review their expenses carefully.

These changes may require you to adjust your budget or seek out additional resources to cover the increased costs. It’s important to stay informed about all tax law updates so that you can make informed decisions for your business.

As you continue to navigate Tennessee’s tax landscape, it’s also worth keeping up with any updates to tax credits and incentives programs that may benefit your small business. These programs can help offset some of the costs associated with running a business and encourage growth opportunities.

Stay tuned for our next subtopic where we’ll discuss these updates in more detail.

Updates to Tax Credits and Incentives Programs

As we continue our discussion on Tennessee’s tax landscape for small businesses in 2023, let’s now turn our attention to the updates to tax credits and incentives programs. These changes present new opportunities for businesses seeking financial relief and rewards. Additionally, there are adjustments to existing programs that may affect eligibility criteria or benefit amounts.

Our team has closely studied these developments and is prepared to guide you through the intricacies of these key points.

New Programs and Opportunities

Small businesses in Tennessee can take advantage of new tax programs and opportunities to maximize their profits in 2023. These programs offer a variety of benefits for small business owners, including startup funding and tax deductions.

Here are some examples:

  • The Tennessee Angel Tax Credit Program offers tax credits to investors who support early-stage companies. This program is designed to encourage investment in startups and help them grow.
  • The Rural Economic Opportunity Fund provides grants and loans to small businesses located in rural areas of the state. This program helps promote economic development and job creation in these communities.
  • The Small Business Innovation Research (SBIR) Program provides funding for small businesses that are developing innovative technologies or products. This program can help entrepreneurs bring their ideas to market.

By taking advantage of these programs, small businesses can access valuable resources that can help them succeed in today’s competitive marketplace.

As we’ve discussed, there are many new tax programs available for Tennessee small businesses in 2023. However, it’s also important to consider changes to existing programs that may affect your business.

In the next section, we’ll explore updates to tax credits and incentives programs that could impact your bottom line.

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Changes to Existing Programs

As we discussed earlier, Tennessee is introducing new programs and opportunities to support small businesses. However, it’s important to note that there are also changes being made to existing programs, particularly in relation to tax reform and state regulations.

One of the significant changes that small business owners need to be aware of is the update on state sales tax laws. In 2023, remote sellers who exceed a certain threshold will be required to collect and remit sales taxes in Tennessee. This change aims to level the playing field between brick-and-mortar retailers and online sellers.

Additionally, there have been updates on the Business Tax Exemption program that reduces or eliminates franchise and excise taxes for qualifying businesses. As small business owners navigate through these changes, it’s critical for them to stay informed about current tax laws and regulations by regularly checking with their accountants or financial advisors.

With these updates in place, it’s essential for businesses to ensure compliance with all applicable tax requirements as non-compliance could lead to penalties or fines.

Now that we’ve covered the changes in existing programs, let’s move onto some tips for small business owners on how they can effectively manage their finances.

Tips for Small Business Owners

For entrepreneurs looking to stay on top of their tax obligations, it’s helpful to keep a few key tips in mind.

First and foremost, it’s important to engage in thorough tax planning throughout the year. This means regularly reviewing your financial records and consulting with a professional tax advisor to ensure that you’re taking advantage of all available deductions and credits.

In addition to diligent tax planning, maintaining accurate record keeping is essential for small business owners. This includes keeping detailed records of all income and expenses, as well as any other relevant financial transactions. By doing so, you’ll be able to quickly and easily provide documentation in the event of an audit or other inquiry from the IRS.

Other important tips for small business owners include staying up-to-date on changes in tax laws and regulations, utilizing technology such as accounting software to streamline record keeping processes, seeking out educational resources such as workshops and seminars offered by local government agencies or industry associations, and considering hiring a professional bookkeeper or accountant to assist with tax-related tasks.

By following these guidelines, small business owners can minimize their risk of penalties or fines related to non-compliance with tax laws while maximizing their opportunities for growth and success.


In conclusion, small business owners in Tennessee must be aware of the changes to tax laws that’ll come into effect in 2023. These changes include modifications to sales tax collection requirements, franchise and excise tax laws, and updates to tax credits and incentives programs.

It’s crucial for small businesses to understand these changes as they can significantly impact their operations. Failure to comply with these laws can result in penalties and fines. Therefore, it’s essential for business owners to seek professional advice from accountants or tax professionals who can guide them on how best to navigate these new regulations.

Overall, staying informed and up-to-date on Tennessee’s tax laws is vital for any small business owner operating within the state. By being proactive and taking appropriate action now, businesses can avoid potential problems down the line and ensure continued success in the future.

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