It’s exciting to start a business or side hustle. But once the planning and dreaming are past, and the real work begins, things can get a little more daunting.
Among the more daunting chores for any newbie business owner is figuring out whether you need a business license and what permits you might need. The good news is that Tennessee business licenses and permits are not impossible to figure out.
Today’s post is all about the purpose of business licenses and permits, how to get them, and what you should keep in mind at this point in your entrepreneurial journey.
The main purpose of licenses and permits is to ensure that every business is complying with the laws and regulations that govern the area in which the business operates.
You cannot get these documents if you are not currently able to prove your right to run a business. Likewise, if you fail to do the things to stay in compliance, you can get your license or permits revoked.
Thus, getting your small business licenses and permits is a critical part of your game plan.
There are 2 main differences between licenses and permits.
The first difference has to do with their purpose. A business license says that you are allowed to operate your business or side-hustle in the state of Tennessee. A permit says that you are allowed to engage in a specific activity that is related to your business, such as construction, hanging signs, or serving alcohol.
The other main difference between the two is how you obtain them. Business licenses and permits each have different requirements. We will take a closer look at the general Tennessee business licenses and permits in the following sections.
There are a few different documents that you might need in the state of Tennessee. Most businesses will have a basic license, as well as some specialized small business licenses and permits that pertain to their field, sales activities, or location.
The state of Tennessee requires that businesses operating within its borders have a “minimal activity license” from the county or municipal clerk in which the business operates, provided they have gross receipts between $3000 and $100,000.
For businesses that do more than $100,000 worth of activity, you must have a “standard business license” from your county or municipal clerk. You cannot operate unless you have this license and you have clearly posted it at your place of business.
When you register new businesses with the county or municipal clerk, you need to pay $15 in registration fees. You must pay the same amount for each additional business.
If you are subject to tax because your gross receipts fall into the financial range listed above, you must also register with the state to pay the tax. You can learn more on the Department of Revenue Registration and Licensing page and can register to pay taxes on the TNTAP page.
Different rules govern businesses that are primarily located out of state. These businesses are considered to have a “nexus” in Tennessee if they have gross receipts from sales of $100,000 or more from any county in Tennessee.
In that case, you have to register with the Tennessee Department of Revenue and pay the appropriate tax. You do not need a business license from the state, though.
Additional licenses and permits a business needs from the state, county, or city will depend on your business activities and business location. You may need extra Tennessee business licenses and permits if you:
If your business will provide alcohol or tobacco, you will need special permits, which you can find out more about on this Department of Revenue page.
If you aren’t sure which business licenses and permits might apply to you, you should head to the Tennessee Secretary of State website. They have tons of information about requirements and documentation, and you can contact them and ask questions there as well.
Business activities that are regulated by a federal agency may need a federal license or permit in order to operate legally. You can learn more about such small business licenses and permits by visiting the U.S. Small Business Administration website.
This handy site lists a ton of different sectors that require extra federal licensing and permitting in order to remain in compliance. Although there is a significant range of potential sectors, some of the most common are transportation, energy, agriculture, and firearms.
Now you know a bit more about Tennessee business licenses and permits and how they might apply to you, here’s a step-by-step guide to applying for them.
Before you can get the right licenses and permits, you need to figure out exactly which ones you need. This will vary depending on your exact situation, where you live, your sector, and more. In general, though, your list may include:
No. 4 is sometimes overlooked by new business owners, who forget to check the regulations in their own city because they are so busy making sure they’re compliant at the state and federal level. Don’t make that mistake. Always do a thorough search of your area to make sure you are following all applicable rules and regulations.
To figure out the overall licenses and permits you will need, check the following sites:
If you need to speak with a person at the federal level, you can call the U.S. Small Business Administration at 800-827-5722. Although the hold times may be lengthy, you will eventually get through to someone with whom you can have a conversation. If you have not yet been able to figure out which federal regulatory agency applies to your business, you can ask at this time.
The Tennessee Department of Revenue does a good job directing business owners to the appropriate channels to get their questions answered. Check out their Contact page for phone numbers and other information.
Now it’s time for the hard part: applications. You’ll be happy to know that it’s not really that hard, though.
All Tennessee business licenses flow through the county in which the business operates. To get the appropriate license for your business:
How much your business license costs may vary depending on where you are based.
Follow this general process of going to the appropriate website, by agency, and following their specific guidelines until you have gotten all of your Tennessee business licenses and permits.
Make sure to track the status of all of your applications as you are awaiting approval. Small business licenses and permits have different processing times, so write them down at the time of application. For instance, Tennessee’s business licenses are estimated to take up to 10 days, though the application may go through more quickly than that.
You will almost certainly need to renew your Tennessee business licenses and permits at some point over the life of your business. Check the specific requirements for the business license as well as each of the permits for which you apply. Note this on your calendar, as you are not legally allowed to operate your business without the correct documentation in place.
Now that you know a bit more about Tennessee’s rules for small business licenses and permits, we hope you feel a bit more prepared to go after your dream!
If you don’t obtain the appropriate Tennessee business licenses and permits, then you are potentially operating outside of the law. Make sure to do your due diligence.
As a sole proprietor, you do not need to register with the state of Tennessee. That means you don’t need to incorporate as an official entity. However, you are still required to get a business license from your county if you have gross receipts above $3,000.
A business license is good for one year in Tennessee. You must renew it every year within 30 days after the due date of your tax return for the previous business this year. That means if your business year ended on December 31st, and your tax return was due April 15th, then you must reapply for your license by May 15th of that same year.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
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