hey, there's not that many of us, but I would like to ask a question of you.
TN is proud to be a "no-state-income-tax" state, but often the result of this means the rest of Tennessee's tax structure is out-of-balance. The Corporate tax, for example, is a double barreled "Franchise & Excise" tax which not only taxes profits, but also property values very heavily.
The TN lawyering profession is enamoured with creating LLCs. They are creating LLCs for wet-weather springs, single vehicles, single buildings, etc. However, the lawyers rarely tell the owners that the LLC is taxable under the dreaded abovementioned F&E tax. I have had 4-5 clients in the last 2-3 yrs which have been infuriated when I prepare a TN corporate tax for their LLC, and since the lawyer never told them, then it is I who am assumed to be wrong.
Essentially, the LLC invites the TN Dept of Revenue to a table to which they would otherwise be locked out. Upon discovery, one of my clients remarked that it's like "inviting a voluptuous 38-year-old redhead to an expensive restaurant, and then she brings along her 17-year-old son who is a walking stomach."
My question to other TN preparers: Are there any situations where a Tennessee LLC would NOT be taxed as a corporation? I've had to deal with a couple infuriated clients in the recent 2-3 weeks. I've researched the TN Code annotated but can't read any guidance in either direction.
TN is proud to be a "no-state-income-tax" state, but often the result of this means the rest of Tennessee's tax structure is out-of-balance. The Corporate tax, for example, is a double barreled "Franchise & Excise" tax which not only taxes profits, but also property values very heavily.
The TN lawyering profession is enamoured with creating LLCs. They are creating LLCs for wet-weather springs, single vehicles, single buildings, etc. However, the lawyers rarely tell the owners that the LLC is taxable under the dreaded abovementioned F&E tax. I have had 4-5 clients in the last 2-3 yrs which have been infuriated when I prepare a TN corporate tax for their LLC, and since the lawyer never told them, then it is I who am assumed to be wrong.
Essentially, the LLC invites the TN Dept of Revenue to a table to which they would otherwise be locked out. Upon discovery, one of my clients remarked that it's like "inviting a voluptuous 38-year-old redhead to an expensive restaurant, and then she brings along her 17-year-old son who is a walking stomach."
My question to other TN preparers: Are there any situations where a Tennessee LLC would NOT be taxed as a corporation? I've had to deal with a couple infuriated clients in the recent 2-3 weeks. I've researched the TN Code annotated but can't read any guidance in either direction.
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