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Comment by nodesocket | Hacker News Reader

-- Update: Buried deep in the depths of TN website and using the most confusing and counterintuitive language ever assembled is this article:

https://revenue.support.tn.gov/hc/en-us/articles/204647155-W...

Essentially it says if I am a disregarded entity for federal tax purposes I am exempt from both franchise and exercise taxes.

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Ok, I am even more confused after reading this:

https://revenue.support.tn.gov/hc/en-us/article_attachments/...

How do you even have a single member LLC that is a disregarded entity where the single entity is a corporation? Huh?

That seems to indicate I am responsible for these taxes?

> How do you even have a single member LLC that is a disregarded entity where the single entity is a corporation?

LLC stands for "limited liability company," not corporation [1]. When one says "corporation" in a legal sense, it is typically understood to exclude LLCs. (That said, LLCs can elect to be treated as corporations for tax purposes.)

[1] https://en.wikipedia.org/wiki/Limited_liability_company

LLC members can be other LLCs or corporations.

I'm not an accountant/lawyer, but yeah my reading is if you're a sole proprietor, disregarded for IRS purposes (e.g. you use Schedule C)... then yeah you owe TN this tax.

FWIW, I don't live in TN, but I used to. And I've done sole prop LLC's in a couple states now so I looked into moving back to TN and found this info.

That is also how I read it, but I reached out to an accountant today and he said no. His response was:

> Since you are an LLC, and you are operating an active business, you will need to file a Franchise and Excise tax return, but you will be exempt from the Excise portion of the tax.

No idea how it works? I'm thoroughly confused.

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