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New Member
posted Jun 6, 2019 7:10:06 AM

If I have a sole proprietorship in TN, do I have to file a state tax return? (We moved here in Sept 2016 and my business is online tutoring.)

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1 Best answer
New Member
Jun 6, 2019 7:10:08 AM

A sole proprietorship is not a legal entity, separate and apart from the owner. The income and expenses of a sole proprietor are reported on Schedule C (Form 1040) as part of your individual income tax.

The State of Tennessee does not have a general income tax for individuals. Accordingly, your sole proprietorship income is not taxable in Tennessee.

Tennessee has the Hall income tax, which is assessed only against interest and dividend income in excess of certain limits. If this tax applies to you, you should complete and file your tax return before April 15.

The Tennessee Hall income tax is imposed only on individuals and other entities receiving interest from bonds and notes and dividends from stock. Your Hall income tax return is due on the 15th day of the fourth month following the end of your fiscal year.  For example, if your fiscal year ends on December 31, then your return is due on April 15.

4 Replies
New Member
Jun 6, 2019 7:10:08 AM

A sole proprietorship is not a legal entity, separate and apart from the owner. The income and expenses of a sole proprietor are reported on Schedule C (Form 1040) as part of your individual income tax.

The State of Tennessee does not have a general income tax for individuals. Accordingly, your sole proprietorship income is not taxable in Tennessee.

Tennessee has the Hall income tax, which is assessed only against interest and dividend income in excess of certain limits. If this tax applies to you, you should complete and file your tax return before April 15.

The Tennessee Hall income tax is imposed only on individuals and other entities receiving interest from bonds and notes and dividends from stock. Your Hall income tax return is due on the 15th day of the fourth month following the end of your fiscal year.  For example, if your fiscal year ends on December 31, then your return is due on April 15.

New Member
Jun 6, 2019 7:10:09 AM

Thank you! This was exactly what I needed to know.

New Member
Jun 16, 2021 6:42:14 PM

Please verify for certain if possible, if a sole proprietor has to pay a business tax in Tennessee on the gross income derived from computer services rendered to customers. Please note that absolutely no products of any kind are sold to customers. 

The DEPT OF REVENUE claims a sole proprietor such as myself must pay a percentage of gross earnings.

Thank you for your help.

Level 15
Jun 17, 2021 7:25:23 AM

https://www.tn.gov/revenue/taxes/business-tax.html

 

This forum discusses INCOME tax issues and you are asking about the TN business tax issues ... see the info in the above link.