Tennessee Income Tax
Tennessee has no state income tax. This makes it one of the most attractive states for high earners and retirees. You will still owe federal income tax.
Tennessee Sales Tax
The state sales tax rate in Tennessee is 7%. With an average local sales tax of 2.55%, the combined average sales tax rate is 9.55%.
This is one of the highest combined sales tax rates in the country. Budget accordingly for large purchases.
Tennessee Property Tax
The effective property tax rate in Tennessee is 0.64%. With a median home value of $232,600, the median annual property tax bill is $1,317 ($110/month).
Corporate & Business Taxes
The corporate tax rate in Tennessee is 6.5%.
Other Taxes in Tennessee
| Tax Type | Rate / Amount |
|---|---|
| Gas Excise Tax | $0.27/gallon |
| Cigarette Tax | $0.62/pack |
| Estate Tax | No |
| Inheritance Tax | No |
Key Facts
No income tax. Highest combined sales tax rate (tied with Louisiana). Groceries taxed at reduced rate.
Compare to Other States
See how salaries compare on our average salary in Tennessee page. Thinking about starting a business? Check our LLC guide for Tennessee. See the current minimum wage in Tennessee.
Financial Calculators
Plan your finances in Tennessee with our free tools:
- Paycheck Calculator — estimate take-home pay after taxes
- Salary Calculator — convert hourly to annual pay
- Mortgage Calculator — estimate monthly home payments
- Home Affordability Calculator — see how property taxes affect what you can afford