Tennessee has no state personal income tax, and LLCs owe Franchise & Excise (F&E) Tax. A Wyoming holding company does not erase Tennessee's own entity-level obligations on a Tennessee subsidiary, but it can still add liability separation and keep the parent's ownership off Tennessee's public LLC filings.
Virtually every LLC doing business in Tennessee owes the Franchise & Excise Tax, filed annually on Form FAE170 — including LLCs with zero revenue, since the $100 minimum franchise tax applies regardless of profitability. Founders relocating from true no-entity-tax states like Wyoming, or from Texas LLCs under its no-tax-due threshold, are frequently caught off guard by this $100 minimum landing on an otherwise inactive entity. Only a narrow set of exempt entity types (nonprofits, certain family-owned entities meeting a 95%-family-ownership test, and others) escape the tax entirely.
The general federal tax treatment of holding companies (consolidated filings, dividends-received deductions, and the like) is set at the federal level and does not change state to state — what changes is the entity-level tax Tennessee itself charges an LLC or corporation formed or registered there.
Tennessee's tax story for a holding structure is genuinely mixed and is often overstated in its favor. There is no personal income tax on wages or salary, and the Hall tax on interest and dividends was retired effective January 1, 2021, so money that ultimately reaches an individual member is not taxed at the Tennessee personal level. The entity layer is where Tennessee gets expensive: most LLCs registered in Tennessee owe franchise tax (0.25% of net worth, $100 minimum) and excise tax (6.5% of net income, with a $50,000 standard deduction since 2024) at the entity level, because Tennessee regards many federally disregarded entities as separate taxpayers. A pure investment-holding LLC that buys, holds, and sells securities on its own behalf may qualify for the obligated member entity exemption, but an LLC holding operating subsidiaries or real estate typically does not. Plan for franchise and excise tax on each operating entity, not just on the parent.
Every Tennessee corporation owes the state's combined franchise and excise tax administered by the Department of Revenue, even though Tennessee has no tax on wage or salary income. The franchise tax is 0.25% of apportioned net worth with a $100 minimum, and the 2024 repeal of the alternative property measure (SB 2103) left only the net-worth base in place. The excise tax is 6.5% of net earnings, against which corporations may apply the $50,000 standard deduction added in 2024. These taxes are reported together on Form FAE 170, due the 15th day of the fourth month after fiscal year-end.
Tennessee LLCs must file Annual Report with Tennessee Secretary of State (filed via the TNCaB portal), due April 1 (1st day of the 4th month after fiscal year-end for calendar-year entities), with a fee of $300 minimum for LLCs with 1–6 members, plus $50 per additional member above 6, capped at $3,000.
Failing to file risks administrative dissolution by the Secretary of State — and note that online card payments carry a 2.29% processing surcharge, so budget slightly above the base fee if paying by card.
A common structure pairs a Wyoming LLC as the parent with a Tennessee entity handling operations, holding property, or running a Tennessee-facing business.
The Tennessee entity still owes whatever Tennessee itself charges — Franchise & Excise (F&E) Tax — regardless of where its parent is formed; pairing it with a Wyoming LLC does not change the Tennessee subsidiary's own filing or tax obligations. What the Wyoming parent adds is liability separation, and the Wyoming company's own ownership stays out of Tennessee's public LLC filings.
For more on the general structure, see the Wyoming holding company guide and how to set one up.
Tax agency reference: Tennessee Department of Revenue (tn.gov/revenue).
Note: Tax rates, fees, and thresholds shown here reflect state tax research last verified July 2026; reconfirm current figures directly at tn.gov/revenue before relying on them for a specific filing.
Tennessee's tax treatment of a holding structure comes down to its lack of a state personal income tax and its Franchise & Excise (F&E) Tax. If you have questions about structuring a Wyoming-Tennessee holding arrangement, reach out through our contact form.
If you have questions about structuring a Wyoming-Tennessee holding arrangement, reach out through our contact form or call +1 (307) 683-0983 to speak with one of our experienced Business Success Advisors. Visit our homepage and blog for more.