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 6.50 percent corporate income tax rate and levies a gross receipts tax. Tennessee has a 7.00 percent state sales tax rate, a max local sales tax rate of 2.75 percent, and an average combined state and local sales tax rate of 9.55 percent. Tennessee’s tax system ranks 8th overall on our 2022 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: How Does Your State Compare?

Top Individual Income Tax Rate

Does Not Have an Individual Income Tax

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State and Local Individual Income Tax Collections per Capita

$36

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State and Local Tax Burden

7.6%

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Top Corporate Income Tax Rate

6.50%

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State Business Tax Climate Index Ranking

8

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State Sales Tax Rate

7.00%

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Average Local Sales Tax Rate

2.55%

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Combined State and Average Local Sales Tax Rate

9.55%

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State and Local General Sales Tax Collections per Capita

$1411

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State Gasoline Tax Rate (cents per gallon)

27.4¢

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State Cigarette Tax Rate (dollars per 20-pack)

$0.62

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Property Taxes Paid as a Percentage of Owner-Occupied Housing Value

0.68%

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State and Local Property Tax Collections Per Capita

$834

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Featured Articles

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