SUT-18 Sales Tax and Business Tax Filing for Single Member LLCs

Under Tennessee law, LLCs are treated for state and local tax purposes the same way they are treated for federal income tax purposes. As a result, when a SMLLC is disregarded for federal income tax purposes, and its single member is a “corporation,” the SMLLC is disregarded for franchise, excise, business, and sales and use tax purposes.  A “corporation” in this context means any entity that is classified as a corporation for federal income tax purposes.

Tennessee law also requires that persons conducting business in this state report and remit sales tax and business tax on a location-by-location basis. Therefore, a person with multiple Tennessee locations must register for sales/use tax and business tax for each individual location.

SMLLCs making taxable sales from a Tennessee location should register that location under the consolidated sales/use and business tax accounts of its corporate single member for the purposes of filing returns and remitting the taxes. Only one sales/use tax and business tax location registration is required if a SMLLC and its corporate single member are making sales from the same location.

If a SMLLC wishes to register for sales/use and business tax separate from its corporate single member, it may do so. However, while the SMLLC may file returns and remit the respective taxes under its own accounts, the corporate single member is ultimately responsible for the tax and the tax liability is determined on the basis that the SMLLC is a division of its corporate single member.

Please see F&E 3 - Filing Requirements for Disregarded Entities for more information regarding franchise and excise tax filing requirements.

Reference: Tenn. Code Ann. §§ 48-211-101, 67-6-601(a), and Tenn. Comp. R. & Regs. 1320-04-05-.28(1).

Note: This article was updated on November 4, 2021. The previous version of SUT-18 is available here.

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