Utility Gross Receipts Taxes

The utility gross receipts tax of 3% is based on intrastate gross receipts. Gross receipts taxes are paid by utilities; gas, water, electric power and light companies; and sewage companies. Tennessee offers the following incentives and exemptions:

• Manufacturers and distributors of manufactured or natural gas are taxed at a rate of 1.5%.
  
• Utilities operated by the United States, cities, or political subdivisions of the state are exempt from the gross receipts tax.