HIT-24 - Single-Member LLC – Hall Income Tax F&E Credit

A single-member limited liability company (“SMLLC”) owned by an individual is subject to the Hall income tax on income received from stock dividends and bond interest. Tennessee law allows a credit against franchise and excise tax (“F&E”) in an amount equal to the Hall income tax paid. To receive the F&E tax credit, a SMLLC must actually file a Hall income tax return and pay the corresponding liability. Because a SMLLC and its individual owner are separate for Tennessee Hall income tax and F&E tax purposes, a SMLLC may not credit Hall income tax paid by the individual owner on the owner’s Hall income tax return against its F&E tax liability.

References: Tenn. Code Ann. §§ 67-2-102; 67-4-2007(d); 67-4-2009(7).

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