Business Tax License
| Phone: 865.215.2392 Fax: 865.215.3156 Email: business.taxes@knoxcounty.org |
Forms for Download |
Business Tax License Application Process
Most businesses 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.
From their start date, new businesses have a 20 day grace period to obtain a license. The application fee is $15.00, payable to “Knox County Clerk”. The applicationrequires information such as: business name, exact location, business mailing address, business start date, Federal Employer’s Identification Number or Social Security Number, Sales Tax Number, if applicable, type of ownership, business activity, and owner information.
- Click here to download an Application for Business Tax License.
Classifications for Tax Purposes
Tennessee’s businesses subject to taxation under business tax laws must be classified to determine the correct amount of business tax to pay each year. Applying for the Business Tax License will register the business for this tax. These rates vary based on the type of business and, in many cases, whether the business sells at wholesale or retail.
Tennessee businesses pay business tax to the Department of Revenue based on their “dominant business activity.” Tennessee Code Annotated Section 67-4-702(a)(5) defines dominant business activity as “the business activity that is the major and principal source of taxable gross sales.” This means a business pays all its business tax based on the source of the earnings that make up the majority of their collections.
The following lists the different classifications. Each business must choose a classification and only one classification is allowed. For questions concerning your application or your classification, you may contact the Knox County Clerk’s office at (865) 215-2392. For all questions on tax law, filing and paying business taxes or other account related issues, contact the Tennessee Department of Revenue at 1-800-342-1003. More information regarding business tax is available in the Business Tax Guide.
Classification 1A - Food and/or beer 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;
Classification 1B - 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;
Classification 1C - Hay, grain, feed, fertilizer, seeds, bulbs, nursery stock and other farm, lawn and garden supplies
Classification 1D - Gasoline, diesel fuel and motor oils sold at retail.
Classification 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.
Classification 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.
Classification 4 - Construction contractors; special trades; excavation; quality testing; exterminating and pest control; transmission line installations; sales of farm produce.
Bond - Persons in Classification 4 located outside Tennessee, must, when applying for a business tax license, execute a bond or establish an escrow account with the county or municipality in which they are applying. This bond will be executed by two good and sufficient sureties approved by the county or municipal clerk or by a surety company duly authorized to do business in this state. This bond or escrow account will be in the amount sufficient to pay that person’s anticipated business tax liability for the balance of the tax period for which such license applies; as determined by the county clerk. The bond may be called by the state in the event of failure by the person to pay its business tax liability. [Tenn. Code Ann. Section 67-4-707] Click here to download information regarding an Out of State Contractor’s Bond.
Other Taxes Imposed on Various Business Activities
Amusement Tax (Monthly, 5% of Gross)
Going Out of Business Permits ($50.00/30 Days)
Hotel/Motel Tax (Monthly, 5% of Gross, added to room invoice-Paid by occupant)
Mobile Home Installation Decals ($45.00 each)
Sexually Oriented Business Permits ($100.00 application fee/$50.00 renewal)
Sexually Oriented Employee Permits ($50.00 application fee/$25.00 renewal)
Solicitor’s Permit (Door-to-Door Sales)($50.00/month)
Transient Vendor Permits ($57.00/14 Days)
Downloadable forms and additional information will be available shortly. Please contact the Knox County Clerk’s office at (865) 215-2392 for further details.
