Index
Tennessee No State Income Tax
Summary
Tennessee is one of the few U.S. states that levies absolutely zero state income tax on earned wages, salaries, or investment income.
Rights & Rules
- 01.You do not owe any state income tax on your salary, hourly wages, bonuses, or tips.
- 02.As of 2021, the state fully repealed the 'Hall Income Tax,' meaning you also do not owe state tax on interest and dividends from investments.
- 03.Tennessee makes up for this by having one of the highest combined state and local sales tax rates in the country (often approaching 10%).
Penalties
- 01.While there is no individual income tax, businesses (LLCs, corporations) must still file and pay the Franchise and Excise Tax based on their net worth and earnings in the state.
Verified Citations
Tennessee Code Annotated Title 67, Chapter 2 (Repealed)
Source"For tax years beginning on or after January 1, 2021, the Hall income tax is completely repealed. Taxpayers are no longer required to file the return or pay the tax..."