Business Tax License

The following information is designed to inform you of Business Tax in general. It is not intended to completely address the lengthy and complex business tax laws and regulations. After you’ve read the information below, please contact the respective office. Business Tax is administered by the Tennessee Department of Revenue, but is collected by local governments. Business Tax is classified as a privilege tax for the right to do business within the counties and cities of Tennessee.

EFFECTIVE JULY 1, 2008,
Tennessee Code Annotated 8-21-701 allowed for the increase of existing fees regarding Business Tax and the origination of other fees. Such fees are as follows:

• A $2.00 fee increase from $5.00 to $7.00 for the Business Tax recording fee per return/application, to be applied only to the County (GSD) amount due.
• A $1.50 fee increase from $3.50 to $5.00 for County (GSD) and $5.00 for Metro (USD), if applicable, for the transfer of a Business license from one location to another. This fee will NOT be charged if the address change is made when filing the annual report form.
• A $3.00 fee increase from $2.00 to $5.00 for certifying a copy of a document or taking an acknowledgement or affixing a seal. (Subpoenaed documents are not included)
• A $.50 charge for copies, per page.
• A $2.00 handling fee for refund claims submitted to this office. This fee must be remitted with the Claim for Business Tax Refund forms and is NON-REFUNDABLE, even if the refund is denied.

It is the policy of the Davidson County Clerk’s Office to retain reasonable overage amounts as fees to this office for the handling/processing of refund requests.

Also, effective immediately, a convenience fee of 2.35% of the total Business Tax/License due will be assessed by the electronic processing company for credit/debit card payments received. No part of this fee goes to Metro Government.

This office will implement the above fees in compliance with state and local laws.

As always, you may call our Business Tax Division at (615) 862-6254, if there are any questions.

NOTE: All forms affected by the fee changes are in the process of being changed; however, if you have received/downloaded a form or an application that does not reflect the new fees; you are still required to include the appropriate fee in your payment. WHO IS REQUIRED TO HAVE A LICENSE
The owners or operators of all for-profit businesses, except manufacturers and specific business professionals, must pay the local business tax for each place of business located in the county and /or the city which collects the business tax. If both the county and the city levy the tax, the business may be liable for both.

HOW DO I OBTAIN A BUSINESS LICENSE
When applying for a business tax license, you must provide the following:
– Business name, business address, business telephone number
– Owner's name(s), home address, home telephone number, social security number
– Copy of owner(s) driver's license
– Signature of each owner

* Also when applying, you will be required to give your dominant business activity of item(s) sold or services rendered that will generate the most sales and/or revenues. This office will properly classify you according to your dominant business activity. Business tax has four (4) different classifications, each with its own tax period and its own tax rate, as shown below. Each classification contains a variety of businesses.

Effective September 1, 2002, Chapter 856 of the Public Acts of 2002 amends the Business Tax by increasing the Business Tax rates.

As a courtesy, our office will mail you the appropriate business tax report form at the end of your designated tax period. If for some reason you do not receive your business tax report form, please click here to download. You are required to complete the form, provide the total gross sales and/or revenues for items sold and services rendered, apply the appropriate tax rate(s) and return the form with payment by the assigned due date. A business can apply both the retail and the wholesale rates to the gross sales, if applicable. Retail sales are sales to users or consumers who do not resale. Wholesale sales are sales to retailers who resale to users or consumers. If a business has both retail and wholesale sales, then the business can separate its sales accordingly if each type of sale accounts for at least 21% of the net taxable sales. In other words, if wholesale sales make up less than 21% of the net taxable sales, then they are treated as 100% retail sales, and vice versa.

APPLICATION FOR NEW BUSINESS LICENSE AND THE LICENSE AND TAX REPORT
The “Application for New Business Tax License” form is available for download and/or printing as well as the "License and Tax Report" form, the "Deduction Sheet," and the "Instruction Sheet." The FREE Adobe Acrobat Reader is required to view/print this document. If you have any questions, please call 615-862-6254.

HELP DESK FOR FILING AND RENEWING
You may contact this office in person or by telephone for general assistance in the filing or renewing of your business tax and licenses. Document the clerk's name and ask for his/her extension for answers to future questions. For additional information please contact (615) 862-6254 extension 77550.

TRANSIENT VENDOR LICENSE
A person/business selling or offering to sell new merchandise to the public on temporary premises and does not have a permanent, fixed location in Tennessee where the business is conducted is considered a transient vendor. A transient vendor can be both a Tennessee resident or an out of Tennessee resident. A transient vendor is required to obtain a 14-day permit from this office to conduct business in this county and/or city. If the permit expires prior to the scheduled ending date, then a new permit must be obtained for an additional 14 days. If the temporary premises is located in the Urban Services District (USD), then the permit fee is $112.00. If located in the General Services District (GSD), the permit fee is $57.00. For additional information please contact (615) 862-6254 extension 77145.

Application for Transient Vendor License

Examples of businesses requiring a transient vendor license are: Convention show booth tenants where products are sold; seminars where products are sold; out of state parades or special event participants.

CLOSE OUT BUSINESS PERMIT
You must have a Close Out Business Permit BEFORE you advertise that you are having a Going-out-of-business sale. Please read Title 6.92. Questions?  Please call our office at 615-862-6254 extension 77144.

OTHER LICENSES & PERMITS ISSUED BY THIS DEPARTMENT:
Pawnbroker License - For additional information please call (615) 862-6254 extension 77145.
Sidewalk Encroachment Permit - For additional information please call (615) 862-6254 extension 77129, 77132, or 77135.
County Liquor License - For additional information please call (615) 862-6254 extension 77134.

WHY SOME BUSINESSES ARE AUDITED
All businesses subject to business tax must keep and preserve records showing the gross sales and any other books of account needed to determine the amount of tax due. All such books and records shall be open to inspection at all reasonable hours by this office, and are subject to an audit. Audits are performed to ensure the proper payment of business tax, as well as, the understanding of the tax by the taxpayers. Audit candidates are normally chosen randomly. However, if several businesses in a specific industry do not have an understanding of the law, audits may be performed primarily to assist. By reviewing the records and obtaining an understanding of a specific business, the audit results will determine if the gross sales reported are accurate; the proper deductions are taken; the wholesale and/or retail rate should be applied; all the appropriate credits are applied; the business is required to pay the business tax; as well as, other findings. Some audits may result in a finding of overpayment of the business tax and a refund may be due.

FREQUENTLY ASKED QUESTIONS
How much does a business license cost?
The fee for a business license is $42.00 if you are located in the USD (Metro) and $22.00 if you are located in the GSD (County only).

What happens if my license expires?
The report of gross sales, payment of taxes, a renewal of licenses are due in this office within two (2) months after the license expires. Both penalty and interest are charged on delinquent returns. Final business tax returns are due within 15 days of termination, sale or closing of a business.

What if my business never starts?
If a business tax license is obtained yet the business never started, this office must be notified in writing to avoid the business being carried as a delinquency and assessed penalty and interest.

What if I sell my business?
A final business tax return is due within 15 days after your last day of business. The new owner must apply for his/her new business tax license within 20 days of opening. It is the new owner's responsibility to verify that all the business taxes have been paid by the previous owner; otherwise, the new owner must pay the outstanding taxes.

Where do the business taxes go?
A percentage is remitted to the TN Department of Revenue, the remainder is forwarded to the operations of Metro Nashville Government.

What if I have to move?
Please notify this office if your business location or business mailing address changes.
*Effective July 1, 2008,T.C.A. 8-21-701 increased the transfer fee of a business from one location to another to $5.00 for county (GSD) and $5.00 for Metro (USD).

What do I do if I own/manage a hotel/motel?
Hotel/Motel Occupancy Tax page