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The Tax Foundation is the nation’s leading independent tax policy nonprofit. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and global levels. For over 80 years, our goal has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity.
How does Tennessee’s tax code compare? Tennessee does not have an individual income tax. Tennessee has a flat 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 14th overall on our 2023 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
State and Local Individual Income Tax Collections per Capita
State and Local Tax Burden
Top Corporate Income Tax Rate
State Business Tax Climate Index Ranking
State Sales Tax Rate
Average Local Sales Tax Rate
Combined State and Average Local Sales Tax Rate
State and Local General Sales Tax Collections per Capita
State Gasoline Tax Rate (cents per gallon)
State Cigarette Tax Rate (dollars per 20-pack)
Property Taxes Paid as a Percentage of Owner-Occupied Housing Value
State and Local Property Tax Collections Per Capita
March 30, 2023
March 27, 2023
March 23, 2023
March 7, 2023
February 21, 2023
February 7, 2023