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Knox County Tennesee

Business Tax

Phone: 865.215.2392
Fax: 865.215.3156
Email: business.taxes@knoxcounty.org

 

(click link for more information)

 

Every business within Knox County must register with the Knox County Clerk. Those businesses located within the municipal boundaries of the City of Knoxville must also register with the City of Knoxville Department of Finance. Businesses located outside the Knoxville City limits are not required to register with the city tax collector, nor are those businesses required to pay the City of Knoxville Gross Receipts Business Taxes. (TCA 67-4-706)

Business taxes are collected for the purpose of supporting Knox County’s infrastructure and services. The Knox County Clerk is responsible for collecting these business taxes and business licensing fees as per the following ordinance:

“It shall be the duty of each taxpayer to exhibit the license so received (TCA 67-4-723).”

The Business Tax Roll in Knox County is divided into 6 service areas, with a representative of the Knox County Clerk’s Business Tax Division, to better serve the business community. To identify the representative assigned to your account, find the zip code for your business location in the table below and the corresponding name and contact information:

Steve Elder
865-257-5247
steve.elder@knoxcounty.org
 37754, 37779, 37912, 37918, 37938, 37721
Jack Kerr
865-659-9273
jack.kerr@knoxcounty.org
 37764, 37806, 37901, 37914, 37915, 37917, 37924, 37871
Kaye Kimble
865-215-2392
kaye.kimble@knoxcounty.org
 All outside counties and/or states
Kimberly Brewer
kimberly.brewer@knoxcounty.org
865-659-9316		 37849, 37922, 37934
Wendy Iturbe
wendy.iturbe@knoxcounty.org
865-659-9258		 37830, 37921, 37923, 37930, 37932, 37933
Mona Word
mona.word@knoxcounty.org
865-659-7955		 37902, 37909, 37916, 37920, 37929, 37931, 37919


Business Tax Application

The business tax application fee is $22.00 ($15.00 Minimum Tax + $7.00 Recording Fee). From their start date, new businesses have a 20 day grace period to obtain a Business License. The application contains information regarding: business name, location, mailing  address, mailing information, ownership, structure, business start date, primary item or activity, estimated percentage of retail and wholesale receipts. This information is used to determine the classification of the business. Some exemptions apply to certain persons and business activities, so please read below for more information.


Classifications for Tax Purposes

The Knox County Clerk’s Business Tax Office classifies businesses for the purpose of collecting appropriate business taxes according to the ordinance and class divisions below.

“Businesses, vocations and occupations which are taxable are set forth in the following classifications; provided, that each person shall be classified according to the dominant business activity (TCA 67-4-708.”

Class 1 Food and/or beer generally destined for home consumption; sales of lumber, building materials, tools, paint and glass, electrical supplies, HVAC components and supplies lawn, garden and/or farm suppliesmotor vehicle fuel.

Type A - Food and/or beer as defined in § 57-6-102, generally destined for home preparation and consumption, except persons engaged in the business of selling delicatessens and candy at retail; services performed by food brokers; and gasoline and diesel fuel sold at wholesale;
Type B - Lumber, building materials, tools, builders hardware, paint and glass, electrical supplies, roofing materials, farm equipment, plumbing, heating and air conditioning equipment, other basic lines of hardware, gasoline, diesel fuel, except sales covered by subdivision (1)(D), and other sales of tangible personal property by persons operating service stations, except sales of gasoline, diesel fuel and motor oils;
Type C - Hay, grain, feed, fertilizer, seeds bulbs, nursery stock and other farm, lawn and garden supplies and tools; or
Type D - Gasoline, diesel fuel and motor oils sold at retail.

Class 2
New and used motor vehicles, off-road vehicles, recreational vehicles, and boats sales of apparel and accessories; sales of home furnishings, radio ; and television equipment, musical instruments, household appliances, cleaning supplies; prescription drugs and patented medicines; prepared food and drinks; sales of coal, wood, ice, fuel oil and LP gas.

Class 3
Business and personal services; book stores; stationery and art supplies; antiques; tobacco products; sporting goods; toys, games, novelties and gifts; cameras and photographic supplies; optical supplies; jewelry and gemstones; pets and pet supplies; pawn shops; swimming pools; luggage; fireworks; delicatessens; custom clothing; office supplies; bait and tackle; collectibles.

Class 4
Construction contractors; special trades; excavation; quality testing; exterminating and pest control; transmission line installations; sales of farm produce.

- Click here to download a Knox County Business Tax Reporting Form
- Click here to download Instructions for a Knox County Business Tax
Reporting Form and Schedule



Gross Receipt Business Tax Reporting Periods and Payment Due Dates:

The business tax reporting periods and payment deadlines are scheduled according to business classification. All classifications have a 60-day grace period to report and pay taxes. The minimum tax per annum for each location or outlet, imposed under § 67-4-709, shall be due and payable by all taxable persons according to the following schedule: 

  • Class 1- Reporting period -January 1st to December 31st. Payment due Dec. 31.
  • Class 2- Reporting period - April 1st to March 31st. Payment due March 31.
  • Class 3- Reporting period - July 1st to June 30th. Payment due June 30.
  • Class 4- Reporting period - October 1st to September 30th. Payment due Sept. 30.

- Click here to download a Knox County Business Tax Gross Receipts Form

Delinquent Gross Receipts Business Taxes

The taxes imposed in this part shall become delinquent as follows: 

  1. The minimum tax due upon the opening or commencement of a new business or outlet shall be delinquent twenty (20)    days after such opening or commencement; and 
  • On the following dates (according to § 67-4-714) by classification: 
    • On each March 1, for all persons taxable under Classification 1; 
    • On each June 1, for all persons taxable under Classification 2;
    • On each September 1, for all persons taxable under Classification 3;
    • On each December 1, for all persons taxable under Classification 4;

Exemptions from the Business Tax:

State privilege tax laws exempt certain persons and business activities from the gross receipts business tax (T.C.A. Code 67-4-712). The list below contains some, but not all, activities which do not require a Knox County Business Tax License or the payment of the tax:

  • Certain blind persons.
  • Disabled Veterans.
  • Persons in capacity as employee.
  • Orders for future delivery.
  • Manufacturers.
  • Newspaper carriers.
  • Religious or charitable organizations.
  • Participants in state fairs.
  • Sales of produce or livestock by farm owner.
  • Admissions to amusements, shows, or theatrical productions within an enterprise zone.
  • Certain professionals required to pay the Professional Privilege Tax and obtain license from the State (physicians, lawyers, architects, engineers, surveyors, banks, etc.).
  • Insurance carriers and agents.
  • Disposition or management of one’s own property.
  • Public utilities.
  • Educational services by schools, colleges, universities, etc.

 

Gross Receipts Business Tax Rates

For the exercise of the privileges described in § 67-4-708, a minimum tax of fifteen dollars ($15.00) is payable by each business for each fixed place, location or outlet from which business is done. In addition to the minimum tax, businesses pay a tax according to the dominant business activity of the business. Taxes are calculated as follows:


Class 1 Retail 0.0667% or Gross Receipts X 0.000667 = Tax Due
  Wholesale 0.0250% or Gross Receipts X 0.000250 = Tax Due
Class 1 A Retail 0.1000% or Gross Receipts X 0.001000 = Tax Due
  Wholesale 0.0250% or Gross Receipts X 0.000250 = Tax Due
Class 1 B Retail 0.1000% or Gross Receipts X 0.001000 = Tax Due
  Wholesale 0.0375% or Gross Receipts X 0.000375 = Tax Due
Class 1 C Retail 0.1000% or Gross Receipts X 0.001000 = Tax Due
  Wholesale 0.0375% or Gross Receipts X 0.000375 = Tax Due
Class 1 D Retail 0.5000% or Gross Receipts X 0.005000 = Tax Due
Class 2 Retail 0.1500% or Gross Receipts X 0.001500 = Tax Due
  Wholesale 0.0375% or Gross Receipts X 0.000375 = Tax Due
Class 3 Retail 0.1875% or Gross Receipts X 0.001875 = Tax Due
  Wholesale 0.0375% or Gross Receipts X 0.000375 = Tax Due
Class 4 Retail 0.1000% or Gross Receipts X 0.001000 = Tax Due

Businesses with a mix of wholesale and retail can split their rates as long as each category comprises at least
20%  of  the total business. For instance, if a Class 2 business does 40% retail and 60% wholesale, it can pay
 0.1% tax on 40% of its receipts and .025% tax on 60% of its receipts. However, if the same business did 85%
 retail and 15% wholesale, it would have to pay the retail rate on all of its gross receipts because its wholesale
 volume was not at least 20% of total business.

Deductions from Gross Receipts Reported for Business Tax Purposes

Deductions from gross receipts are allowed for certain items as listed below (See Schedule A of Knox County Business Tax Reporting Form):

  • Cash discounts allowed and taken on sales.
  • Merchandise returns for cash or credit.
  • Amounts allowed as trade-in on like items.
  • Sales of services performed in other states.
  • Sales where delivery is taken out of state.
  • Amounts paid to subcontractors. (Some Restrictions)
  • Balances due on repossessions.
  • Charge-off debts for un-collectible accounts (during tax period).
  • Federal excise tax on beer, motor fuel, and tobacco products.
  • Tennessee taxes on beer, motor fuel, and tobacco products.

- Click here to download a Knox County Business Tax Schedule A
- Click here to download Instructions for a Knox County Business Tax
Reporting Form and Schedule A

Credits Taken on Gross Receipts Business Taxes Due:

The following credits may be taken by persons filing and paying the tax imposed by this part:          
(TCA 67-4-713)

  • The minimum tax of $15 previously paid with initial license or license renewal.

  • Personal property taxes assessed and subsequently paid may be taken as a credit on the business tax return filed for the year in which the personal property tax was paid or on the return covering the immediately previous year.  If the credit is taken in the previous year, an amended business tax return must be filed for that year.

  • In cases where a lease or rental agreement provides specifically for payment of personal property taxes by the lessee (or renter) to the lessor or owner, the credit may be taken by the lessee (renter) and may not be taken by the lessor or owner. The person or persons who actually paid the personal property tax are the only ones entitled to the credit. 

  • The sum of the credits allowable may not exceed the amount owed

Settlement Upon Termination of Business

(a)  If any business owner(s) liable for any tax, penalty or interest levied by the Knox County Clerk Business Tax Office sells the business or stock of goods, or quits the business, the business owner(s) shall make a final return and payment within fifteen (15) days after the date of selling or quitting the business.  If no taxes are due, the $7.00 collecting and recording fee shall be paid. 

(b)  The successors, or assigns, if any, shall withhold sufficient of the purchase money to cover the amount of such taxes, interest, and penalties due and unpaid until such former owner shall produce a receipt from the county clerk in the case of counties, and proper city collector in the case of cities, showing that they have been paid, or a certificate stating that no taxes, interest or penalties are due. 

(c)  If the purchaser of a business or stock of goods shall fail to withhold the purchase money as provided in subsection (b), the purchaser shall be personally liable for the payment of the taxes, interest and penalties accruing and unpaid on account of the operation of the business by any former owner, owners, or assigns. 

(d) Nothing in this section shall apply to any licensee transferring a business from one location to another,
within the same municipality, on a one-time basis during any annual taxable period.

Taxpayer Records

It is the duty of every taxpayer to keep and preserve records showing the gross amount of sales tax owed to the state, county and city, and the amount of the business’ taxable gross receipts, and such other accounting records as may be necessary to determine the amount of tax due under this part. All such books and records shall at all reasonable hours be open to inspection by any duly representative of the commissioners, county clerk or other proper city tax collecting official.

All such books and records shall be maintained by the taxpayer for a period of three (3) years. All statements, reports or returns of taxpayers and all audits of their records and files made as authorized by this part are confidential. Additionally, it is unlawful for anyone to make known in any manner any information contained in the statements, reports or returns except as follows: 

  • To the taxpayer personally; 
  • To an attorney or other agent duly authorized by the taxpayer; 
  • To employees of the department or of the other tax collectors for the purpose of checking, comparing and correcting returns; 
  • To any collection, regulatory or inspection agency of this state, the United States, or another state; or 
  • In accordance with proper judicial order or as otherwise required by law. 

Other Taxes Imposed on Various Business Activities

  • Hotel/Motel Taxes
    (Monthly, 5% of Gross, added to room invoice- Paid by occupant).
  • Transient Vendor Permits
    ($55.00/14 Days).
  • Amusement Tax
    (Monthly, 5% of Gross)
  • Amusement Ride/ Attraction Permit
    ($25.00 per ride/ attraction)
  • Solicitor’s Permit (Door-to-Door Sales)
    ($50.00/month).
  • Mobile Home Installation Decals
    ($45.00 each)
  • Going Out of Business Permits
    ($50.00/90 days).

Contact the Knox County Clerk’s Business Tax Office for further details.