Skip to content

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?

See Related Articles

Tax Data by State

Get facts about taxes in your state and around the U.S.

Explore Data

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

All Related Articles

2023 State Vape Tax Rates Compare State Vapor Tax Rates and State Vaping Tax Rates

Vaping Taxes by State, 2023

If the policy goal of taxing cigarettes is to encourage cessation, vapor taxation must be considered a part of that policy design.

3 min read

States Move Away from Throwback and Throwout Rules

As more and more states move away from throwback or throwout rules, those states that still impose these rules are becoming less attractive for businesses, which are incentivized to relocate their sales activities to non-throwback states.

6 min read
2023 state gas tax rates by state California Illinois Pennsylvania

How High are Gas Taxes in Your State?

California pumps out the highest state gas tax rate of 77.9 cents per gallon (cpg), followed by Illinois (66.5 cpg) and Pennsylvania (62.2 cpg).

2 min read
2023 state tax changes taking effect july 1

State Tax Changes Taking Effect July 1, 2023

At least 32 notable tax policy changes recently took effect across 18 states, including alterations to income taxes, payroll taxes, sales and use taxes, property taxes, and excise taxes. See if your state tax code changed.

15 min read
2023 beer taxes by state alcohol excise tax rates and beer excise tax rates

Beer Taxes by State, 2023

Taxes are the single most expensive ingredient in beer, costing more than the labor and raw materials combined.

3 min read
2023 state distilled spirits taxes on alcoholic beverages and compare liquor taxes and alcohol taxes across the country using DISCUS sdata

Distilled Spirits Taxes by State, 2023

Of all alcoholic beverages subject to taxation, stiff drinks—and all distilled spirits—face the stiffest tax rates. Like many excise taxes, the treatment of distilled spirits varies widely across the states.

4 min read