Real Estate CPA And Fractional CFO Services for Tennessee Investors
Tennessee does not tax wages or individual investment income, yet LLCs and partnerships that own rental property can owe the state's franchise and excise taxes. Add recordation tax on deeds, county reappraisal cycles, and Nashville's short-term rental rules, and the picture gets complicated. NexusWorks handles bookkeeping, tax planning, and CFO reporting for Tennessee investors.
Rental LLCs owe franchise and excise
Recordation tax hits every deed
STR permits limited by zoning
Serving investors in Tennessee, Texas, Florida, Arizona, Nevada, Colorado, Delaware, and California.
What Trips Up
Tennessee Rental Owners
In Nashville, Memphis, Knoxville, Chattanooga, and the Smoky Mountain rental market, we see these issues again and again:
Owners hear Tennessee has no income tax and never realize their LLC or limited partnership owes franchise and excise tax on rental profits.
Entities still calculate franchise tax using the old property measure, even though it was repealed in 2024 and refunds were available.
Families miss the exemption available to certain family-owned entities that earn mainly passive income.
Short-term rentals in Sevier County and Nashville owe state and local sales tax plus hotel occupancy tax, and filings lag behind bookings.
Reappraisal years raise assessed values sharply, and owners miss the county board appeal deadline.
Commingled accounts make it hard to show lenders accurate net operating income for each property.
These issues are avoidable with accurate books and a tax plan built around Tennessee’s entity-level taxes.
Based in Tennessee? See our CPA, bookkeeping and tax services for Tennessee businesses, including state tax planning and compliance.
Tennessee Taxes
Investors Often Overlook
Why Tennessee Investors Need Specialized Financial Guidance
Tennessee's reputation as a no-income-tax state hides real costs at the entity level. The core issue is:
Entity choice determines the state tax bill. The same rental income can owe nothing when held personally, excise and franchise tax when held in an LLC, or nothing again if a family entity qualifies for exemption. Getting the structure right before buying is far easier than changing it later.
Franchise and Excise Tax on Entities
Tennessee taxes most LLCs, limited partnerships, and corporations on two bases: excise tax of 6.5% on net earnings and franchise tax on net worth. Since 2024, the franchise tax no longer uses the property measure, which lowered bills for many asset-heavy real estate entities.
Family-Owned Entity Exemption
Certain family-owned noncorporate entities can be exempt from franchise and excise tax when most of their income is passive. The rules are detailed and require an annual exemption filing, so eligibility should be reviewed before choosing an entity type.
Recordation Tax and Reappraisals
Recording a deed triggers state recordation tax of 37 cents per $100 of value, and mortgages over $2,000 carry a separate indebtedness tax. Counties reappraise on multi-year cycles, and residential and commercial property are assessed at different percentages of value.
Short-Term Rental Rules in Nashville and the Smokies
Nashville limits non-owner-occupied short-term rentals by zoning and permit, while Gatlinburg and Pigeon Forge cabins carry state and local occupancy taxes. Licensing and tax filings need to match each property's status.
How NexusWorks Helps Tennessee Investors
We build our services around Tennessee’s entity taxes and the realities of long-term, mid-term, and vacation rentals across the state.
Tax Planning and Filing:
Federal returns, franchise and excise returns, exemption filings, sales and occupancy tax for short-term rentals, cost segregation, and 1031 exchanges. We revisit your plan during the year, not only at filing time.
Your bookkeeping, tax, and reporting are coordinated by one team.
Bookkeeping and Reporting:
Property-level monthly reconciliations, booking platform payout matching, and clean net operating income for lenders.
Fractional CFO Services:
Cash flow forecasting, refinance and acquisition packages, and reporting for partners and investors in Tennessee rental funds.
Looking for clearer Tennessee portfolio numbers?
Talk to a CPA-led team about entity taxes, exemptions, and cash flow before your next purchase.
Why Tennessee Investors
Choose NexusWorks
We specialize in real estate, so franchise and excise tax for rental entities and short-term rental compliance are part of our everyday work.
A single team handles bookkeeping, tax, and CFO advisory, reducing gaps and turnaround time.
A CPA reviews every return before it is filed.
Remote service for Nashville, Memphis, Knoxville, Chattanooga, and the Smoky Mountain market.
Simple published pricing. See nexusworks.cpa/pricing.
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Frequently Asked Questions
Not for individuals who own property in their own name. Rental income earned through an LLC, limited partnership, or corporation is generally subject to Tennessee franchise and excise tax unless the entity qualifies for an exemption.
The legislature removed the property measure, so franchise tax is now based on net worth. Real estate entities that paid under the old method may have qualified for refunds for recent years. We review prior returns when we onboard new clients.
Possibly. Tennessee exempts certain family-owned noncorporate entities whose income is mainly passive, but ownership, income mix, and annual filing rules all matter. We test eligibility before you form or restructure an entity.
Yes. We work in QuickBooks or Xero, connect to your bank and property management reports, and deliver monthly statements and planning calls online.
Short-term cabin rentals generally owe Tennessee sales tax, local sales tax, and city or county occupancy taxes. Some platforms collect part of this, but owners remain responsible for accurate filings. We reconcile platform reports against your returns each month.