I’m setting up an online business in Tennessee. Am I required to collect Tennessee taxes?

Federal and state laws require you to collect Tennessee sales tax on sales made to Tennessee customers. Anything you sell to customers outside Tennessee is not subject to Tennessee tax.  If you are registered to collect sales tax in Tennessee, you would report all sales on Line 1 of the sales tax return, but deduct sales made to customers outside Tennessee on  Schedule A, Line G.

You must register for sales tax if your gross sales are $4800 or more per year. This would require you to collect sales tax on Tennessee transactions.

Also, Tennessee has a business tax. If your gross receipts are less than $3000, no business tax or license is needed. If you make between $3000 and $9999, you can choose to get a minimal activity license from the clerk's office or get a standard business license from them. Having a standard license requires tax payment to our department of at least $22 per year. If your business' gross receipts are $10,000 or more, you must have a standard business tax license and pay the tax.

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