How Much Do Fishing Guides Make in Tennessee?
Builds guide sites for a livingPublished July 5, 2026Last updated July 27, 202618 min read
- A sole proprietor pays Tennessee nothing on guiding profits.
- An LLC or corporation owes excise tax at 6.5 percent of taxable income.
- It also owes franchise tax at 0.25 percent of net worth, minimum $100.
- The minimum is payable whether the company is active or inactive.
- The family-ownership exemption exists, but trip fees are non-passive income.
Tennessee has no personal income tax, which normally ends the enquiry for a page in this run. It does not end it here, because Tennessee taxes the wrapper instead of the person. A guide operating as a sole proprietor pays the state nothing on profits. The same guide, on the day they register a limited liability company, becomes liable for an excise tax on net earnings and a franchise tax on net worth, with a minimum payable whether or not the company does anything. The tax is attached to the structure, not the income.
| Question | Sole proprietor | LLC or corporation |
|---|---|---|
| State tax on profits | None | Excise tax at 6.5% |
| State tax on the balance sheet | None | Franchise tax at 0.25% of net worth |
| Owed in a year with no trips | Nothing | The $100 franchise minimum |
| Owed while dormant | Nothing | Still the minimum |
| Annual return | Federal only | Due the 15th day of the fourth month |
| Family ownership exemption | Exists, but guiding fees do not qualify | |
Who the tax reaches
Corporations, limited partnerships, LLCs and business trusts. Not individuals.
The department's franchise and excise overview lists the entities caught: a corporation, limited partnership, limited liability company or business trust chartered, qualified or registered in Tennessee, or doing business in the state, must register for and pay both taxes. A person guiding under their own name appears nowhere on that list. So the question a Tennessee guide is really answering is not what rate applies but whether to create something the rate can attach to.
Two taxes, two different bases
One measures what the business earned, the other what it owns.
The pair is easy to conflate and they work on unrelated numbers. The excise tax is based on net earnings or income for the tax year, which is the familiar measure. The franchise tax is based on net worth, defined as the difference between total assets and total liabilities as derived from the taxpayer's books and records. A guiding operation can have a poor season and still carry a boat, a truck and a trailer on its balance sheet, and the second tax notices the assets whatever the first one finds.
The rates
6.5 percent of taxable income and 0.25 percent of net worth.
The published rate schedule gives franchise tax at 0.25 percent of Tennessee net worth and excise tax at 6.5 percent of Tennessee taxable income. The excise figure is a real rate on real profits, comparable to a state income tax by any practical measure, and it lands on an operation that chose a structure rather than on one that earned more. The franchise figure looks trivial as a percentage and is not trivial in effect, for reasons that come down to its floor.
The floor is the part that bites
A $100 minimum, payable whether the company is active or inactive.
The overview states that the minimum franchise tax is $100 and is payable if you are incorporated, domesticated, qualified or otherwise registered through the Secretary of State to do business in Tennessee, regardless of whether the company is active or inactive. That last clause is the one to read twice. A guide who set up an entity, guided for two seasons and then stopped has a company that still owes $100 a year until it is properly wound up. Dormancy is not a defence.
Where the minimum stops binding
At $40,000 of net worth, because a quarter of a percent of that is exactly $100.
The department publishes the rate and the floor but not the crossover, which falls out of the arithmetic. Below $40,000 of net worth the minimum governs and the percentage is irrelevant; above it the percentage takes over and the bill grows. Most working guiding operations sit above that line the moment a boat and a tow vehicle are on the books, so for the majority the franchise tax is a live percentage rather than a flat fee. The figure is this page's calculation, not a published threshold.
The exemption that sounds like it fits
Family-owned non-corporate entities, and guiding does not qualify.
Tennessee offers an exemption whose name will make every family guiding business look twice, and the department's page on it sets two criteria that must both be met. At least 95 percent of voting rights, capital interest or profits must be held by relatives, by trusts for their benefit, or by the estate of a deceased relative. And substantially all of the activity, put at 66.67 percent, must be the production of passive investment income, or that combined with farming.
Why the second criterion excludes a guide
Passive investment income is a closed list, and trip fees are not on it.
The definition is exhaustive rather than illustrative. Passive investment income means gross receipts from royalties, rents from residential or farm property, dividends, interest, annuities, and gain on the sale or exchange of stock or securities, with residential property limited to four units at any one location. Everything else is defined as non-passive. Fees for guided days are gross receipts of some other kind, so a husband-and-wife operation can clear the 95 percent ownership test comfortably and fail the activity test outright.
Who counts as a relative
First cousin or closer, plus spouses and their lineal descendants.
The ownership limb is drawn generously even though the activity limb is not. Natural persons are relatives if by blood or adoption they descend from a common ancestor and their relationship is that of a first cousin or closer, and the definition extends to a spouse or former spouse of such a person and to lineal descendants of a spouse or former spouse. A family guiding operation that also held farm ground might be worth testing against both criteria properly, which is not something this page can do for anyone.
The exemption is not automatic
An application, then an annual renewal.
Qualifying is not the end of it. So the department can verify the conditions have been met, an application for exemption must be filed when the exemption is first claimed and renewed annually thereafter. That is a recurring administrative obligation attached to a relief, which is a familiar pattern and an easy one to let lapse. An entity that stops renewing has an exemption on paper and a liability in fact.
When the money is due
The fifteenth day of the fourth month after the books close.
The annual return falls on the fifteenth day of the fourth month following the close of your books and records, which for a calendar-year business is 15 April of the following year. An extension of seven months is available. Quarterly estimated payments are required on the fifteenth day of the fourth, sixth and ninth months of the current tax year and the fifteenth of the first month of the next, but only where combined tax liability reached $5,000 or more in both the prior and current years.
What the estimate threshold means in practice
Most single-boat operations will never reach it.
Reading the two conditions together matters. The $5,000 combined liability has to be met in both years, so a single strong season does not pull an operation into quarterly payments on its own. At 6.5 percent, $5,000 of excise tax implies roughly $77,000 of taxable income before the franchise component is counted, which is above where a one-boat guiding business typically lands. The obligation is a real one for a larger outfit and largely theoretical for a small one.
What this does to the structure question
Nowhere else in this series does incorporating create a state tax from nothing.
Unsourced reasoning follows. In most states an LLC changes the paperwork and leaves the tax broadly where it was, because the income was already taxable to somebody. Tennessee is different in kind: the profit is untaxed by the state in one structure and taxed at 6.5 percent in the other, with a floor underneath that survives a year of no trips. Whether that changes anyone's decision depends on what the entity was for, and the general trade-off is worked through in the page on operating through a company.
The liability protection is still real
A tax cost is not an argument against a structure by itself.
Still my own reasoning rather than the department's. Guides incorporate because a client gets hurt on a boat, not because of tax, and $100 a year plus 6.5 percent of profit is a knowable price for a known reason. The mistake would be reading a state tax page as advice on structure. What it does say is that a Tennessee guide should know the price before paying it, and that a dormant entity kept alive out of inertia is costing money for nothing. The comparison itself is drawn out in the side-by-side on operating structures.
The other side of the same problem
Tax owed on money that did not arrive, and no relief for money that never did.
The franchise minimum makes an operation pay in a year when nothing came in. The federal rules on uncollectible debts do the reverse and refuse relief for money that was owed and never received. Both are versions of a mismatch between cash and liability, and a guide who has had a season of cancellations and unpaid balances will meet them in the same twelve months. The second one surprises people more, because it feels like it ought to be a deduction.
Why an unpaid trip fee is not deductible
Under the cash method there is nothing to write off.
The federal guidance on bad debt deductions states the rule directly: if you are a cash method taxpayer, and most individuals are, you generally cannot take a bad debt deduction for unpaid salaries, wages, rents, fees, interest, dividends and similar items of taxable income. Fees are named. The reason is that a cash-basis business never reported the invoice as income, so there is no income to reverse. The loss is the empty day, and it is already reflected in a lower figure at the top of the return.
The rule stated the other way
Deductible only to the extent it was already in gross income.
The same page puts it as a positive condition for business bad debts: you may deduct them, in full or in part, only if the amount you were owed is included in your gross income in the current or a prior year. Generally, to deduct a bad debt at all, you must have previously included the amount in income or loaned out your cash. An accrual-basis operation that booked the receivable is in a different position from a cash-basis one that never did.
What a business bad debt actually is
A loss from a debt created or acquired in a trade or business.
The category is broader than an unpaid invoice. A business bad debt is a loss from the worthlessness of a debt either created or acquired in a trade or business, or closely related to it, where a debt is closely related if the primary motive for incurring it was business related. The published examples are loans to clients, suppliers, distributors and employees; credit sales to customers; and standing behind a business loan taken out by someone else. A guide who actually lends money, rather than merely failing to collect a fee, is in that territory.
Proving something is worthless
Reasonable steps to collect, and no reasonable expectation of repayment.
A debt becomes worthless when the surrounding facts and circumstances indicate there is no reasonable expectation it will be repaid, and to show worthlessness you must establish that you took reasonable steps to collect. Going to court is not necessary if you can show a judgment would be uncollectible. The deduction is taken only in the year the debt becomes worthless, and you do not have to wait until a debt is due to decide that it is.
The intention test
A loan you expected not to get back is a gift.
One line closes a route people try. For a bad debt you must show that at the time of the transaction you intended to make a loan and not a gift, and if you lend money to a relative or friend with the understanding they may not repay it, you must treat it as a gift and cannot deduct it. Guiding runs on informal money between people who know each other, which makes that a live distinction rather than an academic one.
Debts outside the business
Totally worthless only, and reported as a capital loss.
Everything not a business bad debt is a nonbusiness bad debt, and the treatment is worse. A nonbusiness bad debt must be totally worthless to be deductible at all, because a partially worthless one cannot be claimed. It is reported as a short-term capital loss on the capital assets form, subject to the capital loss limitations, with a separate line for each debt and a detailed statement attached describing the debt and amount, the due date, the debtor's name and any business or family relationship, the collection efforts made, and why it was judged worthless.
What follows for a booking policy
Money collected before the day is the only reliable protection.
My conclusion, not the agency's. Since an uncollected balance produces no deduction, the tax system offers a cash-basis guide nothing at all when a client walks away from what they owe. That puts the entire weight on getting money in before the trip rather than chasing it afterwards, which is a commercial argument rather than a tax one but is sharpened by the tax answer. What a sensible pre-payment looks like is worked out in the page on deposit sizing, and the practical handling of a client who does not turn up in the no-show playbook.
Two surveys pointing opposite ways
Household employment fell every month while payrolls rose.
Tennessee produced the clearest divergence between the two employment measures anywhere in this series. The civilian labour force fell in each of the first six months of 2026, from 3,541.9 thousand to 3,491.5, and household employment fell in each of them too, from 3,416.2 thousand to 3,367.8, a decline of 48.4 thousand. Over the same months payroll employment rose from 3,375.9 thousand to 3,385.3 and its twelve-month change accelerated from 0.1 percent to 0.8. The unemployment rate barely moved, running 3.5 to 3.6 percent throughout.
The visitor economy is accelerating
Leisure and hospitality climbed from 0.1 percent to 2.4 across the half.
The sector that matters to guiding improved steadily rather than jumping. Its twelve-month changes ran 1.3, 0.1, 0.8, 0.5, 1.4 and 2.4 percent, finishing at the strongest reading of the six, with the level up 4.0 thousand jobs from 370.4 to 374.4 thousand. Education and health finished at plus 3.1 percent and manufacturing crossed back above zero after starting the year at minus 2.1. Financial activities went the other way, ending at minus 1.6. The federal at-a-glance series for Tennessee carries the figures, extracted 22 July 2026.
What none of it measures
Not one source here reports a guide's earnings.
The limits are worth stating plainly on a page built from three of them. A franchise and excise page describes what an entity owes and never asks what it made. A federal topic on uncollectible debts is about relief, not revenue. A sector employing 374.4 thousand people counts none of them individually. Tennessee guiding also spans three separate trades, the tailwater trout fisheries, the big reservoir systems and the river smallmouth water, and the earnings question by species is taken up in what striper work pays.
What a company costs a Tennessee guide in a mediocre year
Arithmetic on published rates applied to an invented set of figures. State taxes only.
The invented operation. An LLC with a boat, motor and trailer carrying $62,000 of net worth after the loan is subtracted, and $48,000 of taxable income after a soft season.
Franchise tax. 0.25 percent of $62,000 is $155, which is above the $100 minimum, so the minimum does not apply.
Excise tax. 6.5 percent of $48,000 is $3,120.
Total to the state: $3,275, against nothing at all for the same guide operating as a sole proprietor.
The year with no trips at all. No income means no excise tax, but the franchise tax still runs on net worth, so the same balance sheet produces $155, and a stripped-back dormant entity still owes the $100 floor.
Not included. Federal income tax and self-employment tax, which are unaffected by any of this, and Tennessee sales tax, which was not researched for this page.
Reading a Tennessee season
Decide the structure deliberately, and close what you are not using.
Three practical points come out of the sources. Treat the entity decision as a priced one rather than a default, because it is the only thing standing between zero state tax on profits and 6.5 percent. Close any company that is no longer working, because the floor keeps running while it is registered. And do not count on recovering an unpaid balance through the return, because a cash-basis operation gets nothing for it. The wider bookkeeping that keeps all three visible is set out in a workflow built for guiding.
Tennessee against the others
The only state where the answer depends on a filing cabinet rather than a fishery.
Set it beside South Dakota, whose department publishes a sheet naming fishing guides and taxing the trip itself. There the charge follows the service and every guide pays it. Set it beside Nevada, whose commerce tax has a threshold no guiding business will ever reach. There the answer is nothing, for everybody. Tennessee splits the trade in two on a decision made at a registry desk. Cancellation and refund terms sit directly alongside all of this and are worked out in the page on refund policy design. The business hub collects the rest of what a guiding operation has to keep running.
Nothing above reports what a Tennessee guide charges or earns. The 6.5 percent, the 0.25 percent, the $100 minimum, the $5,000 estimate threshold, the 95 percent and 66.67 percent exemption criteria and the seven-month extension are published figures; the $62,000 net worth and $48,000 income are invented to show the mechanism. The $40,000 crossover point is this page's arithmetic and appears nowhere in the department's material. Only Tennessee franchise and excise tax is calculated here. No federal tax is computed anywhere, and Tennessee sales tax was not researched at all, so nothing on this page says whether a guided trip is a taxable sale in Tennessee. Whether any particular entity qualifies for the family ownership exemption is a question of fact not decided here, and neither is whether a specific unpaid amount is a business or nonbusiness debt. Nothing is said about guide licensing in Tennessee or about federal credentialing. Confirm the current rates and the exact obligations attaching to your own entity with the department before acting on any of it, and get proper advice before restructuring a business.
How this was checked
The Tennessee franchise and excise material comes from three pages of the Tennessee Department of Revenue, all read 27 July 2026. From the overview at tn.gov/revenue/taxes/franchise---excise-tax.html: that a corporation, limited partnership, limited liability company or business trust chartered, qualified or registered in Tennessee, or doing business in the state, must register for and pay franchise and excise taxes; that the franchise tax is based on net worth, being the difference between total assets and total liabilities as derived from the taxpayer's books and records; that the excise tax is based on net earnings or income for the tax year; and that the minimum franchise tax is $100 and is payable if you are incorporated, domesticated, qualified or otherwise registered through the Secretary of State to do business in Tennessee, regardless of whether the company is active or inactive. From the due dates and rates page at tn.gov/revenue/taxes/franchise---excise-tax/due-dates-and-tax-rates.html: franchise tax at 0.25 percent of Tennessee net worth and excise tax at 6.5 percent of Tennessee taxable income; the annual return due the fifteenth day of the fourth month following the close of books and records, being 15 April for a calendar-year filer; a seven-month extension; and quarterly estimated payments on the fifteenth day of the fourth, sixth and ninth months of the current tax year and the fifteenth of the first month of the next, required where combined tax liability is $5,000 or more in both the prior and current years.
The exemption material comes from the family-owned non-corporate entities page at tn.gov/revenue/taxes/franchise---excise-tax/exemptions/exemption-fonce.html: that both criteria must be met, being that at least 95 percent of voting rights, capital interest or profits are owned by relatives, trusts for their benefit, or the estate of a deceased individual who while living was a relative; and that substantially all, put at 66.67 percent, of the activity is the production of passive investment income or that combined with farming. Also taken from it: the relative definition covering persons descended by blood or adoption from a common ancestor whose relationship is first cousin or closer, plus spouses, former spouses and lineal descendants of a spouse or former spouse; the definition of passive investment income as gross receipts from royalties, rents from residential or farm property, dividends, interest, annuities and gain on the sale or exchange of stock or securities, with residential property limited to four units at any one location, and the statement that non-passive income is any other gross receipts not on that list; and the requirement to file an application for exemption when first claimed with annual renewal thereafter. The conclusion that a guiding business fails the activity criterion is this page's reading of that closed list, not a department statement about guiding.
The bad debt material comes from Internal Revenue Service Topic no. 453, Bad debt deduction, at irs.gov/taxtopics/tc453, read 27 July 2026. Taken from it: that generally, to deduct a bad debt, you must have previously included the amount in income or loaned out your cash; that if you are a cash method taxpayer, and most individuals are, you generally cannot take a bad debt deduction for unpaid salaries, wages, rents, fees, interest, dividends and similar items of taxable income; that you must show you intended a loan and not a gift, and that money lent to a relative or friend on the understanding it may not be repaid is a gift; that a debt becomes worthless when the facts indicate no reasonable expectation of repayment, that you must establish reasonable steps to collect, that court action is unnecessary where a judgment would be uncollectible, that the deduction is taken only in the year of worthlessness and that you need not wait until the debt is due; the definition of a business bad debt as a loss from the worthlessness of a debt created or acquired in a trade or business or closely related to it, with the closeness test turning on primary motive, and the examples of loans to clients, suppliers, distributors and employees, credit sales to customers and acting as surety on a business loan; that business bad debts are deductible in full or in part only if the amount owed is included in gross income in the current or a prior year; and that nonbusiness bad debts must be totally worthless, cannot be claimed when partially worthless, are reported as a short-term capital loss subject to the capital loss limitations, and require an attached statement giving the description and amount, the due date, the debtor's name and any business or family relationship, the collection efforts made and the reason for judging the debt worthless.
What is arithmetic or commentary rather than quotation. The $40,000 crossover, at which 0.25 percent equals the $100 minimum, is this page's own calculation and the department publishes no such figure. The $155 franchise tax, $3,120 excise tax and $3,275 total are calculated on invented net worth of $62,000 and invented taxable income of $48,000. The estimate that $5,000 of excise tax implies roughly $77,000 of taxable income is also this page's arithmetic. The observations that Tennessee is unusual in creating a state tax out of a structure choice, that liability protection remains a valid reason to incorporate regardless, and that the bad debt rule shifts the weight onto pre-payment, are unsourced reasoning and are flagged in the text where they appear.
The labour figures come from the U.S. Bureau of Labor Statistics, Economy at a Glance: Tennessee, data extracted 22 July 2026, seasonally adjusted, June 2026 preliminary. The civilian labour force falling 3,541.9 to 3,491.5 thousand across the six months; household employment falling 3,416.2 to 3,367.8 thousand, a decline of 48.4 thousand; unemployment 125.6 to 123.8 thousand; the unemployment rate at 3.5, 3.6, 3.6, 3.6, 3.6 and 3.5 percent; total nonfarm rising 3,375.9 to 3,385.3 thousand with twelve-month changes of 0.1, minus 0.2, 0.2, 0.0, 0.3 and 0.8 percent; leisure and hospitality twelve-month changes of 1.3, 0.1, 0.8, 0.5, 1.4 and 2.4 percent with the level rising 370.4 to 374.4 thousand; education and health at plus 3.1 percent; manufacturing moving from minus 2.1 to plus 0.1 percent; and financial activities at minus 1.6 percent are read directly off that table. The characterisation of this as the clearest household-versus-payroll divergence in the series is a comparison against figures already published across these pages, not a BLS statement. The Tennessee table reports no occupational earnings for fishing guides.
If you guide in Tennessee and your phone is quieter than your fishing, I’ll build you a free preview of your booking site before you pay a cent.
Get a free website previewThe entity decision, priced
Does Tennessee tax a guide's income?
Not if the guide operates in their own name. There is no personal income tax, and the franchise and excise taxes reach corporations, limited partnerships, limited liability companies and business trusts chartered, qualified or registered in the state, or doing business here. An individual sole proprietor is not on that list. So the state's answer depends entirely on what structure the business wears.
What happens if I form an LLC?
Two taxes arrive at once. Excise tax at 6.5 percent of Tennessee taxable income, which is a real rate on real profits, and franchise tax at 0.25 percent of Tennessee net worth, being total assets less total liabilities from the books. The first is familiar; the second is unusual because it measures the balance sheet rather than the year's trading, so a bad season does not switch it off.
Is there a bill in a year with no trips?
Yes, and this is the clause to read twice. The minimum franchise tax is $100 and is payable if you are incorporated, domesticated, qualified or otherwise registered through the Secretary of State to do business in Tennessee, regardless of whether the company is active or inactive. Dormancy is not a defence. An entity someone stopped using years ago is still accruing, which is a live cost of leaving paperwork alone.
Does the family-owned exemption cover a guide business?
The name suggests it should and the definitions say otherwise. Two criteria must both be met: 95 percent family ownership, and substantially all of the activity, put at 66.67 percent, being the production of passive investment income or that combined with farming. Passive investment income is a closed list of royalties, rents, dividends, interest, annuities and gains on stock. Trip fees are not on it.
So a husband-and-wife operation is out?
On these criteria, yes, on the second limb rather than the first. The ownership test is drawn generously enough that a couple clears it without effort, extending to relatives first cousin or closer by blood or adoption plus spouses, former spouses and their lineal descendants. It is the activity test that fails, because guiding receipts are defined as non-passive. An operation that also held farm ground would be worth testing properly.
When is any of it due?
The annual return falls on the fifteenth day of the fourth month after your books close, so 15 April for a calendar-year filer, with a seven-month extension available. Quarterly estimated payments are required on the fifteenth of the fourth, sixth and ninth months and the fifteenth of the first month of the next year, but only where combined liability reached $5,000 or more in both the prior and current years.
Can I write off a client who never paid?
Generally not, and the reason is structural. A cash method taxpayer cannot take a bad debt deduction for unpaid fees, because the fee was never included in income, so there is nothing to reverse. Federal guidance names fees directly in the list. The loss is the empty day, already reflected in a lower revenue figure, which is a commercial argument for collecting money before the trip rather than chasing it after.
What is the market doing?
The two employment surveys point opposite ways, more clearly than in any other state covered. The civilian labour force and household employment both fell in every month of the first half of 2026, household employment by 48.4 thousand, while payroll employment rose and its year-on-year rate accelerated from 0.1 percent to 0.8. Leisure and hospitality improved steadily across the same months, finishing at plus 2.4 percent.
Sources & methods
- Franchise & Excise Tax, with the rates and FONCE exemption pages, read 27 July 2026 (Tennessee Department of Revenue)
- Topic no. 453, Bad debt deduction, read 27 July 2026 (Internal Revenue Service)
- Economy at a Glance: Tennessee, data extracted 22 July 2026 (U.S. Bureau of Labor Statistics)
Every figure here is traced to a named public source and checked against it. Licensing, tax, and fee rules change. Verify your state’s current rules with the agency directly before you count on any number here.
Evan Knox
I build booking websites and run the ads and search for owner-run fishing guides, one operation per stretch of water. My first guide client, Bowman Fly Fishing, grew its revenue 4x in a year from that work. Field Notes is where I put the straight numbers on the business of guiding.
More field notes
Three fisheries, three selling seasons, one calendar.
I'm Evan, and I work the part of guiding that keeps a long year booked across more than one fishery: booking sites, plus the search and ads that put good guides in front of anglers, with published pricing and one operation per stretch of water. If you run the tailwaters, the reservoirs or the smallmouth rivers and want more days sold direct, text me at (470) 777-9686 and I'll put a free preview together before any money moves.