--- title: "Tennessee Entity Running Costs and Filings" description: "What it costs to keep a Tennessee entity compliant, from franchise and excise tax to annual filings, and how Teamed compares as an EOR." canonical: https://www.teamed.global/country-hiring-guides/united-states/tennessee/entity-running-costs-and-filings --- ![Tennessee business district.](/cluster-assets/country-hiring-guides/united-states/tennessee/entity-running-costs-and-filings/images/hero.webp) # What does it cost to runa company in Tennessee. A Tennessee entity owes ongoing franchise and excise tax plus state filings every year. Teamed's EOR removes that upkeep entirely. Served by Teamed US Inc., Delaware · Payroll via SUNA Solutions Last reviewed 22 September 2026 · Tennessee guide At a glance ## Tennessee running costs in brief Tennessee taxes corporate income through its excise tax at 6.5%, and layers on a separate franchise tax calculated on a margin basis, with a minimum franchise tax of $100 even in a loss year. Registering the entity with the Tennessee Secretary of State carries a formation fee of $300. None of this includes the accounting, registered agent, and filing work needed to keep the entity in good standing. Corporate income tax6.5% Minimum franchise tax$100 Franchise tax basismargin Formation / registration fee$300 Franchise and excise tax ## Two taxes, not one Tennessee runs a combined franchise and excise tax system, and both apply to most corporations and LLCs doing business in the state. The excise tax is Tennessee's version of corporate income tax, charged at 6.5% on net earnings. The franchise tax sits alongside it, calculated on a margin basis rather than simple net worth, and it applies even when the excise tax bill is small. Every entity owes a minimum franchise tax of $100, so there is a floor cost to keeping a Tennessee entity alive regardless of profitability. Formation and filings ## The cost of getting registered Setting up a Tennessee entity starts with a formation or registration fee of $300 payable to the Tennessee Secretary of State. That's the entry cost before any tax obligations begin. From there, the entity needs a registered agent, ongoing bookkeeping accurate enough to support the franchise and excise filings, and someone tracking deadlines so the minimum franchise tax and excise return get filed on time. Miss a filing and the state can lock the entity out of good standing, which then blocks banking, contracts, and payroll. Where the cost really sits ## Tax is rarely the biggest line item The $100 minimum franchise tax and the $300 formation fee are small numbers on their own. The real cost of a Tennessee entity is the recurring work: local counsel on retainer, a payroll provider who understands Tennessee's rules, an accountant filing franchise and excise returns correctly, and someone accountable when the state sends a notice. That overhead exists whether you employ one person in Tennessee or fifty. It's fixed cost, not variable cost, which is exactly why an EOR structure makes sense for a smaller or still-uncertain headcount. Before you commit ## Sometimes an employer of record is the better fit An employer of record is sometimes the better answer, not a lesser one, when your Tennessee headcount is small or still moving, or when you're testing the market before committing capital. Talk to a member of the team about your specific plan, or run the numbers yourself in the crossover calculator, since the right call depends on salaries and how long you intend to stay. Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than a ticket queue. Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it on local salaries and employer costs rather than on a headcount rule of thumb. Talk to a member of the team Model the crossover for the United States Who carries it ## Your own entity, when it's time. We set it up, migrate you in, and hand it back intact. Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it. In Tennessee that means we handle the franchise and excise tax registration, the Secretary of State filing, and the ongoing compliance calendar, then hand you a clean entity when you're ready to run it yourself. Global Entity and Employment Operations, which we call GEMO, works the same way across 100+ countries, so the handover pattern in Tennessee is the same one your team will recognize everywhere else. Entity Management (GEMO) The Graduation Model Employer cost calculator > They set up our EU entity and moved hires across without missing a payroll. *Helene Dubois, COO* Talk to an expert about Tennessee Questions ## Tennessee running costs, answered What is Tennessee's franchise and excise tax? It's two taxes combined into one filing system. The excise tax is charged on net earnings at 6.5%, and the franchise tax is calculated separately on a margin basis, with a minimum franchise tax of $100 that applies even in a loss year. Do I owe franchise tax if my Tennessee entity made no profit? Yes. The minimum franchise tax of $100 is owed regardless of profitability, because it's based on the margin calculation rather than net income alone. What does it cost to register a company in Tennessee? The Tennessee Secretary of State charges a formation or registration fee of $300 to set up the entity. That's separate from the ongoing franchise and excise tax obligations that start once the entity is active. Can Teamed handle Tennessee payroll without a local entity? Yes, that's the core of the EOR model. Teamed employs your Tennessee-based staff under its own entity, so you avoid the franchise and excise tax filings and the formation cost entirely while you hire. When does it make sense to set up my own Tennessee entity instead? It depends on your headcount, salary levels, and how long you plan to stay in the state, not a fixed number of employees. Run the crossover calculator or talk to a member of the team to see where your specific numbers land. Where these figures come from ## Sources Figures in this page come from the Tennessee Department of Revenue's franchise and excise tax basics and the Tennessee Secretary of State. ## More on entities in Tennessee - [Hiring in Tennessee, overview](/country-hiring-guides/united-states/tennessee)parent - [Tennessee setting up](/country-hiring-guides/united-states/tennessee/entity-setup)sibling - [Tennessee tax presence](/country-hiring-guides/united-states/tennessee/permanent-establishment-risk)sibling - [Tennessee entity or eor](/country-hiring-guides/united-states/tennessee/eor-vs-entity)sibling - [Tennessee moving from an eor](/country-hiring-guides/united-states/tennessee/moving-from-eor-to-your-own-entity)sibling - [Set up an entity, by country](/entity-setup-by-country)hub - [Entity Management (GEMO)](/entity-management)core - [Talk to an expert about Tennessee](https://www.teamed.global/contact?from=entity-running-costs-and-filings)CTA