Opening a business in the state of Tennessee can be a great idea, particularly if you live within the state's borders. Tennessee is one of only a handful of states that do not levy a personal income tax. The income that flows to you from your business won't be taxed by the state, which means you have more money to reinvest in your start-up. Overall Tennessee has one of the most competitive tax burdens in the entire country. The mixture of no state personal income tax and no state property tax helps keep the tax burden low.

5 Tips to Running a Business in Tennessee

Register with the State

Every business must register with the Tennessee Department of Revenue. Through the state's online tax registration website you can register a new business, register a new location you are opening, and change your address. This is where the state keeps record of how to get in touch with your business, so this information must always be kept up to date.

Know the Business Enterprise Resource Office

Tennessee provides assistance to small companies with less than 20 employees to encourage revenue growth and job creation. The BERO office offers help with identifying financing avenues, connecting to buyers in corporate and government offices, and networking with other entrepreneurs. As you are just starting out this office can be invaluable in making sure your business survives those first few tough years.

Know Your Taxes

If you are going to operate a business, you will have taxes to pay. The number of taxes you will need to collect depends on the top of company you are operating. You might need to collect sales tax if you are selling items or just pay general business tax if your business falls under those guidelines. Here are three of the biggest taxes to know.

Franchise Tax: A tax on the greater of net worth or book value of property owned or used in Tennessee. The tax rate is $0.25 per $100.

Excise Tax: A tax based on the net earnings of the firm earned within the state's borders. There is a formula to determine how much tax will be owed.

Sales and Use Tax: A 7% state tax (plus local tax ranging from 1.5% to 2.75%) on anyone or company that manufactures and sells tangible personal property within the state. There is a long list of exemptions to this tax based on specific situations.

Grab State Incentives

Any time you start a business you want to make sure you are grabbing as much free money or tax discount incentives as possible. Tennessee's state government has a that lets you look for various perks of starting a company within the state's borders.

Grant and Loan Programs

The state is reinvesting in smaller communities to encourage job growth. While your business can't directly get access to these programs since they go to the community, you can be in contact with the right people within those communities to encourage investment in your firm so you can open your business on their main street and not the town on the other side of the interstate.