F&E-15 - Inactive Business, Final Return, and Closing Your Account

The minimum franchise tax of $100 is payable if you are incorporated, domesticated, qualified, or otherwise registered through the Secretary of State to do business in Tennessee, regardless of whether the company is active or inactive. The franchise and excise tax return and minimum tax is required even if your charter or qualification has been forfeited, revoked or suspended without being properly dissolved, surrendered, withdrawn or otherwise properly terminated.

Taxpayers that no longer have business or financial activity in the state should file the final franchise and excise tax return and mark the "final return" box on the first page of the return. The Department will review the account for release of liability. Once all tax liabilities are satisfied, a tax clearance certificate is issued by the Department of Revenue. For taxpayers registered with the Tennessee Secretary of State, the tax clearance certificate must be submitted to the secretary. Contact the Secretary of State at 615-741-2286 for any additional documentation requirements.

When a taxpayer fails to select the “final” box on their last return the department proceeds as though the taxpayer is still operational and expects additional filings. This can result in estimated assessments and the inability to obtain a tax clearance. Should this occur, the taxpayer may file an amended return with the “final” box marked. The department will reverse all estimated assessments for later periods and issue a closure letter or tax clearance letter.

The steps for closing your franchise and excise tax account may be found here.

More information: Department's website page Close A Business, TSCPA - When the "Final Return" box is not checked.

Reference: Tenn. Code Ann. § 67-4-2119.

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