Memphis, TN Local Taxes & Fees: Business Tax Classification (2026)

Memphis Code Chapter 5-12 does not create a separate municipal business-tax classification scheme. Section 5-12-3 levies 'the privilege taxes provided for in T.C.A. § 67-5801 et seq., known as the Business Tax Act...on the businesses, business activities, vocations or occupations carried on in the city at the rates and in the manner prescribed by such act,' effective June 1, 1971 (Ord. No. 981, § 1). Every business operating inside the Memphis city limits is classified and taxed exactly as the state's Business Tax Act classifies it, the city piggybacks on the state's rate table rather than writing its own tiers.

The one place the city departs from the state schedule is contractors. Section 5-12-4 amends 'the rate for public road contractors from the minimum tax of $400.00 per annum to $15.00 per annum, and a minimum tax on all other contractors from $100.00 per annum to $15.00 per annum' (Ord. No. 1072, § 1). So while most classifications track state minimums exactly, public road contractors and other contractors pay a flat $15.00 annual minimum inside the city rather than the state's $400.00 or $100.00 floor.

Collection runs through the city treasurer, who under Section 5-12-1 'shall be the collector of licenses and privileges,' signs every license issued, and keeps a record of each license and the amount paid. Revenue collected under this chapter becomes part of the city's general fund and is appropriated the same way ad valorem tax proceeds are, per Section 5-12-2. Businesses that need to know which classification applies to them must consult the state Business Tax Act schedule directly, Memphis's own code adds no separate local tiers beyond the two contractor carve-outs.