Beginning this year, over 100,000 small businesses will no longer be required to file a return and pay this tax.

The Tennessee Works Tax Act eliminated the annual business tax filing obligation for businesses with annual gross sales under $100,000 within a county or city. The change applies to tax periods ending on or after Dec. 31, 2023. To help raise awareness of this change, the Department of Revenue recently sent letters with instructions to business owners who may be affected asking them to confirm locations that are no longer subject to business tax.

Businesses not liable for tax are still required to keep their business licenses up to date. For jurisdictions where a business’ total gross sales are between $3,000 and $100,000, they must obtain a minimal activity license directly from the local county or city jurisdiction. More information is available on the Department of Revenue’s website here.

If businesses have locations no longer subject to business tax, they should contact the department at 615-253-0600 or revenue.support@tn.gov to update their accounts.

The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws and the collection of taxes and fees associated with those laws. The department collects about 87 percent of total state revenue. During the 2022 fiscal year, it collected $20.9 billion in state taxes and fees and more than $4.3 billion in taxes and fees for local governments.  To learn more about the department, visit www.tn.gov/revenue.