In a significant move to support small businesses within the state, Tennessee has announced that over 100,000 small enterprises will be exempt from the annual business tax filing requirement starting this year. This development follows the enactment of the Tennessee Works Tax Act, which aims to alleviate the tax burden on businesses with annual gross sales less than $100,000 within any county or city. This exemption is applicable for tax periods ending on or after December 31, 2023.
The Department of Revenue is spearheading efforts to inform affected business owners of this legislative change. It has recently dispatched letters to these proprietors, detailing the new guidelines and requesting confirmation for any business locations that may no longer be subject to the business tax. Despite the exemption, it is imperative for businesses to maintain their licenses. Those with gross sales ranging from $3,000 to $100,000 are required to secure a minimal activity license from their local jurisdiction.
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Revenue Commissioner David Gerregano expressed his enthusiasm about the initiative, emphasizing the importance of businesses updating their accounts with the department to benefit from the tax relief. The Department of Revenue, tasked with the administration of state tax and motor vehicle title and registration laws, plays a pivotal role in the collection of state revenue, amassing about 87 percent of the total. In the fiscal year 2022, it successfully collected $20.9 billion in state taxes and fees, alongside over $4.3 billion for local governments.
Business owners seeking to understand the implications of this change on their operations or to update their account details can reach out to the Department of Revenue directly. This tax relief marks a significant stride in fostering a more conducive environment for small businesses in Tennessee, potentially impacting over 100,000 businesses across the state.
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