Business Relocation Advantage - Cost

Cost Advantages

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• Cost of Doing Business

  KPMG’s comparison of business costs among North American cities show that Tennessee consistently

  Taxes	Tennessee	California	New York	Illinois	Florida
  Top Corporate Income Tax	6.5%	8.84%	8.307%	7.3%	5.5%
  Top Personal Income Tax	N/A	10.3%	6.85%	3%	N/A
  Property Tax:  On Land & Buildings, as share of personal income	2.11%	2.58%	4.3%	3.99%	3.45%
  Workers Compensation as % of Covered Wages	0.83%	1.38%	0.72%	0.96%	0.89%
  Unemployment Insurance Tax % (New Employers), 09	2.7%	3.4%	4.1%	3.1%	2.7%
  Unemployment Insurance Tax/ Per Employee, 09	$243	$238	$349	$381	$189
  State Taxes as Percentage of Personal Income	8.60%	10.90%	12.90%	10.90%	9.70%

   For more data and information on taxes in the Nashville area, view our complete tax profile.

• Wage and Salary

  Nashville wages and salaries are competitive and favorable with those of other markets. The supply of talent from local universities and the attractiveness of the Nashville area translate to a good job market supply for the diverse business needs.

  	Median Hourly		Mean Hourly		Mean Annual
  Occupation Title	Nashville	US	Nashville	US	Nashville	US
  All Occupations	$15.00	$15.57	$18.88	$20.32	$39,280	$42,270
  Management Occupations	$34.86	$42.15	$41.32	$48.23	$85,940	$100,310
  Business and Financial Operations Occupations	$24.85	$27.89	$27.74	$31.12	$57,710	$64,720
  Computer and Mathematical Science Occupations	$28.24	$34.26	$29.20	$35.82	$60,740	$74,500
  Architecture and Engineering Occupations	$28.58	$32.09	$29.49	$34.34	$61,350	$71,430
  Life, Physical, and Social Science Occupations	$22.06	$27.51	$24.13	$30.90	$50,190	$64,280
  Community and Social Services Occupations	$16.72	$18.38	$17.63	$20.09	$36,680	$41,790
  Legal Occupations	$31.30	$34.49	$39.80	$44.36	$82,790	$92,270
  Education, Training, and Library Occupations	$19.27	$21.26	$20.91	$23.30	$43,500	$48,460
  Arts, Design, Entertainment, Sports, and Media Occupations	$16.96	$19.99	$22.16	$24.36	$46,100	$50,670
  Healthcare Practitioner and Technical Occupations	$25.31	$27.20	$29.81	$32.64	$62,010	$67,890
  Healthcare Support Occupations	$11.31	$11.80	$12.25	$12.66	$25,480	$26,340
  Protective Service Occupations	$14.17	$16.65	$16.52	$19.33	$34,350	$40,200
  Food Preparation and Serving Related Occupations	$8.10	$8.59	$9.01	$9.72	$18,740	$20,220
  Building and Grounds Cleaning and Maintenance Occupations	$9.79	$10.52	$10.70	$11.72	$22,260	$24,370
  Personal Care and Service Occupations	$9.33	$9.82	$10.80	$11.59	$22,470	$24,120
  Sales and Related Occupations	$11.51	$11.69	$16.09	$17.35	$33,460	$36,080
  Office and Administrative Support Occupations	$14.24	$14.32	$15.23	$15.49	$31,670	$32,220
  Farming, Fishing, and Forestry Occupations	$10.41	$9.34	$11.72	$11.32	$24,380	$23,560
  Construction and Extraction Occupations	$15.43	$18.24	$16.74	$20.36	$34,820	$42,350
  Installation, Maintenance, and Repair Occupations	$18.47	$18.60	$19.58	$19.82	$40,720	$41,230
  Production Occupations	$14.72	$13.99	$16.68	$15.54	$34,690	$32,320
  Transportation and Material Moving Occupations	$12.72	$13.14	$14.42	$15.12	$29,990	$31,450

  Sources: United States Department of Labor - Bureau of Labor Statistics
  May 2008 national Occupational Employment and Wages Estimates
  May 2008 Metropolitan and Nonmetropolitan Area Occupational Employment and Wages Estimates

  For more data and information on workforce costs and related topics, view our complete workforce profile.

• Taxes

  The Nashville area has very attractive tax policies and rates that have earned it high marks as a competitive location and a home to many relocating firms.

  Tax Policy

  • Personal Income Tax: None on wages and salaries; 6 % on certain types of income from dividends, bonds and notes.
  • Sales and Use Tax: State 7%, except food at 5.5%; local option 2.75% with maximum $1,600 per single article of tangible personal property.
  • Corporate Excise Tax: 6.5% on net earnings.
  • Franchise Tax: $.25 per $100, or major fraction thereof, of the issued and outstanding capital stock surplus and undivided profits; minimum $10.
  • Professional Privilege Tax: $400
  • Inventory Tax: None on finished goods inventory.
  • Unemployment Compensation Tax: 0.15% to 10% of first $7,000 of wages paid to each employee in calendar year. Rate is 0% for employers with reserve ratio of 20% or more. The rate for new employers is 6.5% for first three completed calendar years.
  • Local Gross Receipts Tax: Varies from .125 to .16 of 1%. Exempts manufacturers and certain professionals

  Nashville's low tax burden remains one of the most influential factors in the decision to relocate or expand a business in the area. Middle Tennessee's tax climate is consistently ranked among the lowest in the country.

  For more data and information on taxes in the Nashville area, view our complete tax profile.

• Tax-Based Incentives

  There are a variety of incentives available for relocating business. Please visit our Incentives for Relocation page for more details on all of the available benefits.

• Unemployment Insurance Taxes

  Unemployment insurance provides benefits to unemployed workers who have lost their jobs through no fault of their own.

  The Tennessee Department of Employment Security administers the state insurance program. All employers are subject to the tax except self-employed persons who are also a sole employee, sole proprietorships without employees or general partners who are not liable for the premiums. The Tennessee tax portion serves as a credit against a portion of any federal taxes owed for unemployment insurance.

  • State tax rate is 6.5 percent for most new employers to Tennessee.
  • After three full calendar years, the employer is evaluated and a tax rate is assigned.
  • Employer's history of taxes and benefits paid to laid-off employees determines the tax rate.
  • Minimum rate: 0 percent
  • Maximum rate: 10 percent
  • Minimum tax rate 0.15 percent to 0 percent with a reserved ratio of 20 percent or more
  • Estimated average tax rate is 1.7 percent of total wages (1995).
  • Tax paid is based on first $7,000 of wages of each employee.
  • Taxable wages include: salaries, commissions, bonuses, tips, vacation and severance pay.
  • Non-taxable payments include: payments made by employer for insurance, retirement, and annuities.
  • Unemployment compensation taxes are paid on a calendar year basis regardless of the employer's fiscal year.
  • New employers must file an initial report to determine their taxpaying status and receive their Tennessee account number.

• Workers’ Compensation

  Workers’ compensation guarantees that an employee who is injured or becomes sick while on the job will be compensated for any expenses.

  In 2004, the Tennessee legislature instituted a wide range of changes aimed at lowering workers' compensation costs. Since then, the number of workers' compensation lawsuits has fallen in counties across the State and the percentage of settlements without a lawsuit has risen.

  Major changes to Tennessee's workers' compensation program include:

  • Maximum weekly benefits: Increased from 100% of the State's weekly average wage to 105% for the first year of the new law and then 110% beginning July 1, 2005.
  • Lower medical fees: Sets maximum fees that medical providers can charge in workers' compensation cases.
  • Future medical expenses: In serious injuries, the employer cannot offer lump-sum payments to settle future medical costs for at least three years.
  • Lower multiplier: Used to determine final benefits in a settlement where the injured employee returns to the same job. The multiplier dropped to 1.5 times the doctor's impairment rating for accidents that happen after July 1, 2004. Multiplier remains 2.5 times for injuries before that date.
  • Benefit review: Made mandatory for cases occurring after July 1, 2004, in which the employer and employee can't agree on a settlement. It is now a required step before a lawsuit can be filed, however, not required when both sides agree to a settlement.

• Cost-of-Living

  The Nashville area has one of the nation’s most favorable rankings for cost-of-living. Disposable income goes much further in Nashville where the cost-of-living is typically 12% lower than the nation as whole.

  Relocating households to Nashville often experience a windfall benefit as they move from high-cost areas of the country to Middle Tennessee where cost-of-living is lower across the board.

  Housing costs are very attractive in the Nashville market. The average sales price of a home in the area was$164,373 in 2009. Nearly 20% of Nashville's homes have been built in this decade and over 65% of all homes have more than three bedrooms.

  Gasoline prices typically run 5% below the national average.

  For access to detailed comparison on cost-of-living, view our complete Nashville cost-of-living profile.

• Utilities

  While utility costs in the Nashville area vary depending on county and business size, the Nashville area is able to meet business needs while keeping utility costs down.

  Nashville’s local utility resources include:

  • TVA-generated power through area distributors
  • River-borne fuel oils and bituminous coal
  • Natural gas
  • Inexhaustible water supply

  For detailed information on utility rates and policies in the Nashville area, view our complete utilities profile.