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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