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Taxes In Tennessee

Tennessee Tax Rates, Collections, and Burdens

How does Tennessee’s tax code compare? Tennessee does not have an individual income tax. Tennessee has a 6.5 percent corporate income tax rate and levies a state gross receipts tax. Tennessee also has a 7.00 percent state sales tax rate and an average combined state and local sales tax rate of 9.55 percent. Tennessee has a 0.48 percent effective property tax rate on owner-occupied housing value.

Tennessee does not have an estate tax or inheritance tax. Tennessee has a 27.4 cents per gallon gas tax rate and a $0.62 cigarette excise tax rate. The State of Tennessee collects $4,236 in state and local tax collections per capita. Tennessee has $7,418 in state and local debt per capita and has a 105 percent funded ratio of public pension plans. Overall, Tennessee’s tax system ranks 15th on our 2024 State Business Tax Climate Index.

Each state’s tax code is a multifaceted system with many moving parts, and Tennessee is no exception. The first step towards understanding Tennessee’s tax code is knowing the basics. How does Tennessee collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2024: How Does Your State Compare?

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Tax Data by State

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State Tax Data

Individual Taxes

Top Individual Income Tax Rate
Does Not Have an Individual Income TaxSee Full Study
State Local Individual Income Tax Collections per Capita
$26Rank: 43
State and Local Tax Burden
7.0%Rank: 3See Full Study

Business Taxes

Top Corporate Income Tax Rate
6.50%See Full Study
State Business Tax Climate Index Ranking
14See Full Study

Sales Taxes

State Sales Tax Rate
7.00%Rank: 2See Full Study
Average Local Sales Tax Rate
2.55%See Full Study
Combined State and Average Local Sales Tax Rate
9.55%Rank: 2See Full Study
State and Local General Sales Tax Collections per Capita
$1709Rank: 9
State Gasoline Tax Rate (cents per gallon)
27.4¢Rank: 31
State Cigarette Tax Rate (dollars per 20-pack)
$0.62Rank: 42

Property Taxes

Property Taxes Paid as a Percentage of Owner-Occupied Housing Value
0.67%Rank: 37
State and Local Property Tax Collections Per Capita
$845Rank: 47

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