Business Tax

The Business Tax Act makes it a taxable privilege to make sales or engage in any vocation listed in Tenn. Code Ann. Sections 67-4-708(1) – (4). Any county or incorporated municipality on Tennessee may levy the privilege tax on those listed activities that take place within its geographical boundaries. (Tenn. Code Ann. Section 67-4-704) Engaging in any business, business activity, vocation, or occupation described under this act is declared to be a privilege for state purposes and taxable by the state alone. (Tenn. Code Ann. Section 67-4-705) The tax imposed under the Business Tax Act may be collected in addition to any other applicable privilege taxes established by law. The tax will be in lieu of any or all ad valorem taxes on the inventories of merchandise held for sale or exchange by persons taxable under this law. (Tenn. Code Ann. Section 67-4-701)

“Business” Defined
“Business” includes any activity engaged in by any person with the object of gain, benefit, or advantage, either directly or indirectly. Business does not include occasional and isolated sales or transactions by a person who is not routinely engaged in business. Occasional and isolated sales, also known as casual and isolated sales, are sales made by persons not in the business of regularly selling the type of property being sold. Occasional and isolated sales are also sales of tangible property taking place only during temporary sales periods of 30 days or less and occurring no more than twice per year such as the sale of Girl Scout cookies. Business also does not include an individual property owner that utilizes a property management company to manage vacation lodging for overnight rentals.

Hotel and Motel Tax