What are the tax implications of growing hemp in Tennessee?

The Tennessee Department of Agriculture is the state agency that regulates hemp growers. You can find information about when it is legal to grow hemp on their website at https://www.tn.gov/agriculture/farms/hemp-industry.html.

In Tennessee, if you grow agricultural products, you are exempt from the business tax and the sales tax on your sales of agricultural products that you grew. Hemp producers who sell the hemp they grow are therefore exempt from the business tax. They do not need to get a business license from the city or county.  Also, hemp growers are exempt from the Tennessee sales and use tax on sales of hemp they grew.

Businesses that are corporations or LLCs are also subject to Tennessee’s franchise and excise taxes.

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