Obtain a Tax ID (EIN) Number and Register Your Business in Tennessee

This Tennessee Tax ID Application Manual is all you’ll need to obtain a Tax ID (EIN) Number in Tennessee. The EIN Obtainment process can all be done online now, so knowing how to apply over the Internet can allow you to get a number generated in rapid fashion. This works for all types of organizations, including more unique groups such as Non-Profits and LLCs.

Apply Online by Choosing Your Entity Type

Steps to getting a Tax ID (EIN) Number and Register Your Business in Tennessee

1. Tennessee Means Business
2. Forming a Business in Tennessee
3. Federal Tax ID (EIN) Number Obtainment
4. Tennessee State Tax ID Number
5. Localized Licenses and Permits in Tennessee

1. Tennessee Means Business

You may have already chosen Tennessee because you know it’s a strong hub of economic activity, or you may be considering Tennessee as one of several options for your startup. In either case, you’ve selected a strong candidate. Tennessee’s small businesses currently employ more than 1.1 million people in the state, nearing half of all Tennessee employees. Tennessee is also undergoing a tremendous growth spurt of economic activity; there’s been a jump in new business filings in the past few years, and economic growth in the state is outpacing the national average.

As a centrally located Southern state, Tennessee is surrounded by strong economic opportunities. It’s also home to some amazing urban areas, such as Memphis, Knoxville, and Nashville, each of which supports its own community of startups and entrepreneurs. And if urban areas aren’t your thing, there are also plenty of small towns and mid-sized cities you can call home.

2. Forming a Business in Tennessee

Before you get a federal tax ID or Tennessee state tax ID, you should have your business’s legal entity selected. After you finish your business plan, you should have a solid idea how you want your company to develop, and with that information, you’ll be able to choose the most appropriate business structure.

If you’re looking for liability protection, you should definitely choose a corporation or a limited liability company (LLC). Both of these business types exist as distinct legal entities; in other words, the company will earn money, gain assets, and take on debts, rather than the owners as individuals. They’re ideal ways to shield yourself from debts and liability. The flip side is, they’re slightly more complicated to organize and manage; in Tennessee, both LLCs and corporations are responsible for filing annual reports and you may be responsible for paying a franchise tax, based on the total value of your business.

Corporations offer the advantage of public funding; only through a corporation are you able to issue public shares and raise funds. However, corporations are also taxed at the federal level, so if you take a salary or withdraw dividends from the company, you may be subject to double taxation on that money.

If you’re looking for a simpler business structure, you could choose to create a sole proprietorship or partnership. These businesses aren’t as formal and don’t require as much paperwork or maintenance. In most cases, you’ll report any income you make in the business as personal income. The downside is that you’ll be responsible for any debt your business takes on, and you might be held personally liable if your business violates a contract or commits some other infraction.

3. Federal Tax ID (EIN) Number Obtainment

No matter what type of business you choose, you’re probably going to need a federal tax ID. This number, sometimes referred to as an employer identification number (EIN), is a kind of signature for your business giving the federal government and other entities a convenient way to track your financial information.

For example, you’ll use your EIN when hiring new employees, or when filing your year-end taxes. You’ll also need an EIN if you want to open a business bank account. Depending on who you’re doing business with, you may also be required to provide an EIN when bringing on new vendors or contractors.

If you’re working in a sole proprietorship or partnership, you won’t use an EIN for quite as many applications, but it’s still a good idea to get one- for example, using an EIN instead of your personal SSN for business applications can help guard you against identity theft.

If you’re interested in getting a federal tax ID, you don’t need much information to start. Through our services, we can get you registered with the federal government (and get you an EIN you can start using immediately) in a day or less.

Apply for a Tennessee Tax ID Number

4. Tennessee State Tax ID Number

You’re also going to need a Tennessee-specific state tax ID. Though you won’t need it for quite as many functions as an EIN, it’s still vital for several business functions. Remember, Tennessee charges a franchise tax, and you may be responsible for sales taxes or excise taxes, depending on what you’re selling. And if you make enough income, you may also need to pay a state corporate tax rate of 6.5 percent.

Thankfully, the process of getting a Tennessee state tax ID isn’t especially difficult. If you use our services, all we’ll need is a few basic pieces of information about your company, and we can get you registered with the state in a matter of a few hours.

5. Localized Licenses and Permits in Tennessee

In Tennessee, you’ll need to have a general business license in place before you generate any economic activity. This license covers any business that makes more than $10,000 a year, and costs $15 a year. If you’re making between $3,000 and $10,000 a year, you can get a minimal activity license instead.

Note that this license won’t cover you in all situations, or in all areas, however. Like most states, Tennessee allows its individual cities and counties to dictate which types of businesses need licenses or permits to operate. A business that requires a permit in Memphis, for example, may not need a similar permit to operate in Nashville. Make sure to do your research, and determine whether your business requires additional licensure, long before you begin operations.

You can consider your business official once you have a federal tax ID and a Tennessee state tax ID in place. And if you utilize our services, you can get both of them in the span of a few hours to a few days. Make use of our business registration services today!