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. Tennessee’s tax system ranks 8th overall on the 2025 State Tax Competitiveness 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?

Stay informed on the tax policies impacting you.

Subscribe to get insights from our trusted experts delivered straight to your inbox.

Subscribe

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
7.6%Rank: 3See Full Study

Business Taxes

Top Corporate Income Tax Rate
6.50%See Full Study
State Business Tax Climate Index Ranking
8See 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
$1874Rank: 6
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
0.48%Rank: 41
State and Local Property Tax Collections Per Capita
$921Rank: 47

All Related Articles

State and local tax collections per capita by state FY 2021

How High Are State and Local Tax Collections in Your State?

Contrary to initial expectations, the pandemic years were good for state and local tax collections, and while the surges of 2021 and 2022 have not continued into calendar year 2023, revenues remain robust in most states and well above pre-pandemic levels even after accounting for inflation.

4 min read
Do taxes affect where people move? Do taxes affect interstate migration?

Taxes and Interstate Migration: 2023 Update

The latest IRS and Census data show that people and businesses favor states with low and structurally sound tax systems, which can impact the state’s economic growth and governmental coffers.

8 min read
Wireless taxes cell phone tax rates by state 2022 taxes, fees, and surcharges on wireless service 2023 wireless excise tax rates on cellular service

Excise Taxes and Fees on Wireless Services Drop Slightly in 2023

To alleviate the regressive impact on wireless consumers, states should examine their existing communications tax structures and consider policies that transition their tax systems away from narrowly based wireless taxes and toward broad-based tax sources.

18 min read
do people really move because of taxes

Do People Really Move Because of Taxes?

What do The Rolling Stones, NFL star Tyreek Hill, and Maryland millionaires have in common? They all moved because of taxes.

4 min read
2024 State Business Tax Climate Index

2024 State Business Tax Climate Index

In recognition of the fact that there are better and worse ways to raise revenue, our Index focuses on how state tax revenue is raised, not how much. The rankings, therefore, reflect how well states structure their tax systems.

111 min read
Real purchasing power parity by state, city, and county 2023 most expensive us cities and metros

Real Value of $100 by Metropolitan Area, 2023

The differences in purchasing power can be large and they have significant implications for the relative impact of economic and tax policies across the United States.

3 min read
Tax treatment of electric vehicles ev taxes by state 2023 vehicle registration fees and EV tax credits

How Are Electric Vehicles Taxed in Your State?

The state EV taxation landscape reflects the evolving transportation sector and the pressing need to address both fiscal gaps in road funding and environmental concerns.

4 min read