Complete guide to permits and licenses required to start a towing in Nashville, TN. Fees, renewal cycles, and agency contacts.
Required for all LLCs. Expedited filing available for additional fee. Annual Report required separately (see below).
Applies to all LLCs. Failure to file leads to loss of good standing.
Required if using a trade name/DBA. Valid for 4 years.
Required for non-consensual towing and wrecker services. Proof of insurance and equipment inspection required as prerequisites.
Separate from certificate; requires Form MVE-765. Includes criminal background check prerequisite for owners/operators.
Towing services are generally taxable. Apply via Tennessee Taxpayer Access Point (TNTAP).
State collects on behalf of counties/cities. All businesses must obtain local business license; towing classified under specific NAICS.
Towing services are generally subject to sales tax in Tennessee when labor is performed in connection with the sale of taxable parts. If only towing (no parts) is provided, it may be exempt. See TN Rule 1320-05-01-.132 for service taxability. Registration required via Tennessee Taxpayer Access Point (TNTAP).
All Tennessee LLCs are subject to Franchise and Excise Tax regardless of business activity. Excise tax applies to net earnings (effectively income tax), and franchise tax applies to net worth. Filed annually via Form FAE 180.
Required for all employers paying wages to employees in Tennessee. Registration via TNTAP. Employers must withhold Tennessee income tax from employee wages. Filing frequency (monthly, quarterly) depends on accumulated liability.
Employers must register with the Tennessee Department of Labor. Tax is paid on first $7,000 of each employee’s wages annually. Rate decreases with experience rating after several years.
Tennessee allows local option business privilege taxes. For example, Nashville imposes a Business Tax on gross receipts (see https://nashville.gov/Departments/Treasury/Business-Tax). Rates and thresholds vary. Towing businesses may be classified under 'Transportation Services'. Must register with city/county tax office.
Even single-member LLCs without employees may need an EIN to open a business bank account. Apply online via IRS website. Not a tax but a prerequisite for federal tax compliance.
All businesses operating in Memphis require this; towing-specific via NAICS code 488410
Required for businesses outside Memphis; towing classified under automotive services
Verify via zoning district (e.g., C-1, I-1); conditional use permit may be needed for vehicle storage
Complies with Unified Development Code Sec. 15-6-3
Required for fencing, paving impound areas per building code
NFPA compliance for vehicle storage fire risks
Ordinance 5098; towing yards with impounded vehicles often require
Specific to sites with >10 vehicle capacity; confirm with Public Works
Towing under privilege tax classification 8 (automotive services)
Required for county operations
Towing classified under automotive group
Tennessee law requires employers with five or more employees to carry workers' compensation insurance. However, all employers (even those with fewer than five) must carry coverage if any employee is injured in the course of employment. Towing is considered a high-risk industry, so premiums may be higher. Sole proprietors are not required to cover themselves unless they elect coverage.
Tennessee law requires all motor vehicles operated for business purposes to carry liability insurance meeting minimum limits: $25,000 bodily injury per person, $50,000 per accident, and $15,000 for property damage (25/50/15). This applies to all towing vehicles used in operations. Coverage must be continuous and proof may be required during vehicle registration or traffic stops.
While not mandated statewide by Tennessee law, many municipalities and property owners require general liability insurance for towing businesses operating on public roads or private property. Coverage typically includes third-party bodily injury and property damage. Strongly recommended due to high risk of vehicle-related incidents.
Tennessee requires a $10,000 surety bond for each towing company operating in the state. This bond ensures compliance with state towing regulations, including proper vehicle handling, storage, and billing. The bond is filed with the Tennessee Department of Safety and Homeland Security. Required for all LLCs engaged in towing services.
Not legally required in Tennessee for towing businesses. However, it is strongly recommended to cover claims related to negligence, misplacement of vehicles, or improper documentation. Not enforced by any state agency but may be required by contracts or insurance partners.
Not required unless the towing business sells physical goods (e.g., salvage parts). If applicable, product liability coverage is recommended to protect against claims of defective or unsafe products. Tennessee does not mandate this specifically for towing businesses.
Not applicable to standard towing operations. Only required if the business operates a facility (e.g., garage with lounge) where alcohol is served. Towing businesses without such operations are exempt.
Most single‑member LLCs without employees can use the owner’s SSN, but obtaining an EIN is recommended for banking and tax purposes.
If the LLC elects to be taxed as a corporation, Form 1120 must be filed instead.
S‑corp election requires filing Form 2553; S‑corp returns are filed on Form 1120‑S.
Employer must also complete Form I‑9 for each employee.
Towing operations involve heavy equipment, vehicle lifts, and hazardous materials; relevant standards include machine guarding, lockout/tagout, and hazardous communication.
Public‑facing facilities (offices, customer waiting areas) must be accessible; website and phone services must be usable by individuals with disabilities.
Towing companies that perform on‑site vehicle maintenance or fluid disposal must follow RCRA generator standards (e.g., labeling, manifesting).
Claims about response times, pricing, or services must be truthful and substantiated; deceptive practices are prohibited.
Overtime, minimum wage, record‑keeping, and family‑leave obligations apply to towing technicians and drivers.
Intrastate towing may still require a USDOT number if the vehicle exceeds 10,000 lb GVWR. Hazardous material transport requires additional registration.
Most standard tow trucks are under this threshold; only larger recovery rigs may be subject.
Compliance is generally ensured through vehicle manufacturers; however, modifications or repairs must not increase emissions.
All Tennessee LLCs must file an annual report with the Secretary of State. The report is due each year on the anniversary of the LLC's formation date. Failure to file within 30 days of the due date results in a late fee. After 60 days, the entity may be administratively dissolved.
The Internal Revenue Service (IRS) and the Federal Trade Commission (FTC) are the primary federal agencies overseeing compliance for towing businesses in Nashville, TN. The Department of Justice (DOJ) also has oversight regarding ADA compliance.
Yes, some federal compliance requirements have associated fees. For example, ADA Title III compliance can range from $0.00 to $5000.00, and federal income tax filing fees vary depending on your income. Many requirements, however, have no direct fee.
The FTC regulates truth-in-advertising and consumer protection, ensuring towing companies are transparent in their pricing and services. This includes clear disclosure of fees and avoiding deceptive practices.
The frequency of federal income tax filing depends on your business structure. LLCs may file annually using Form 1065, while other structures may use Form 1120-S or Schedule C, also on an annual basis. Estimated tax payments may also be required throughout the year.
You should retain records of all income and expenses, invoices, receipts, and tax returns. The IRS requires detailed recordkeeping for tax purposes and potential audits, and specific retention periods apply to different types of records.
Permit Finder asks follow-up questions to give you an exact list of permits.
Find Your Permits