Does Tennessee have a state income tax?

No. Tennessee is one of the states with no personal income tax on wages or salaries. Residents only pay federal income tax and FICA.

How much is Tennessee state tax on a $100,000 salary?

Tennessee does not tax income, so your state tax on $100,000 is $0. Your take-home pay is approximately $79,180/year after federal taxes and FICA only.

How does Tennessee compare to other states for taxes?

Tennessee is one of the most tax-friendly states for earned income. Compared to high-tax states like California (13.3% top rate) or New York (10.9%), residents keep significantly more of their paychecks.

Does Tennessee have an income tax?

Tennessee does not tax wages, salaries, or most investment income. A prior tax on dividends and interest (the Hall Income Tax) was fully repealed in 2022. Tennessee workers keep 100% of their earned income at the state level.

How does Tennessee make up for having no income tax?

Tennessee relies heavily on sales taxes to fund government services. The state sales tax is 7% on most goods, and combined with local taxes, the rate frequently reaches 9–10%. Tennessee also has higher property taxes in urban areas than neighboring states.

How does Tennessee compare to Georgia for taxes?

Both are popular Southeast states, but Tennessee has no income tax while Georgia has a flat 5.49% rate. For a $100,000 salary, Tennessee saves you roughly $5,490 per year in state income tax vs Georgia — a compelling reason many remote workers have relocated there.

State Tax Guide✓ No Income Tax

Tennessee State Income Tax Guide (2026)

Tennessee has no state income tax on wages or salaries — making it one of the most tax-friendly states for workers in the Southeast.

Top State Rate

No state tax

$100k Take-Home

$79,180

/year (single)

State Tax on $100k

single filer

Tennessee: No State Income Tax

As a Tennessee resident, your state income tax on wages and salaries is $0. You only owe federal income tax and FICA (Social Security + Medicare). This is a significant advantage over states like California or New York, where residents pay an additional 6–13% to the state.

Other taxes to be aware of: Tennessee funds state government primarily through a 7% state sales tax — one of the highest in the nation — with local additions bringing combined rates to 9–10% in many areas. Property taxes are low, averaging about 0.48% of home value. Tennessee has no estate or inheritance tax.

$100,000 Salary in Tennessee — Full Tax Breakdown

Category	Annual	Monthly
Gross Salary	$100,000	$8,333
Federal Tax	−$13,170	−$1,098
FICA (SS + Medicare)	−$0.00	−$0.00
Tennessee State TaxNo state tax	$0	$0
Take-Home Pay	$79,180	$6,598

Assumes single filing status, standard deduction, no 401(k) or HSA contributions. 2026 tax year.

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The 30-second version

1.Tennessee has zero state income tax on wages, salaries, AND investment income (the prior Hall Income Tax on dividends/interest was fully repealed effective 2021). One of only nine no-income-tax states.
2.TN funds government primarily through sales tax — 7% state + 1.5–2.75% local. Combined rates: Nashville 9.25%, Memphis 9.75%, Chattanooga 9.25%, Knoxville 9.25%. Among the highest combined sales tax rates in the country.
3.Property tax is unusually low (~0.48% effective average), behind only HI, AL, and CO. A $400K home pays ~$1,900/year in property tax.
4.Nashville growth story: music industry HQ, healthcare HQs (HCA, LifePoint), corporate relocations (Oracle, AllianceBernstein, Mitsubishi Motors). Major in-migration from CA, NY, IL.
5.No estate or inheritance tax. Highly retirement-friendly: SS, pensions, 401(k)/IRA all untaxed at the state level.

Why you can trust these numbers

Numbers reflect 2026 IRS federal brackets and FICA caps. Tennessee has no state income tax on wages or investment income (the Hall Tax was eliminated in 2021), so the calculator at the top shows your federal + FICA bill — that's your full income-tax picture. Property tax and sales tax are state-collected revenue but not income-based.

Sources: federal brackets + standard deduction from IRS Rev. Proc. 2025-32; state brackets verified against the Tax Foundation 2026 State Income Tax Rates compilation and the Tennessee Department of Revenue's published 2026 schedule.

What "no income tax" actually means in Tennessee

Tennessee is one of nine states with no personal income tax. Whatever you earn — W-2 wages, 1099 contractor income, dividends, interest, capital gains, retirement distributions — Tennessee doesn't touch it. The previous Hall Income Tax on dividends and interest was on a phased repeal that completed in 2021. So 2022 and later: zero state income tax of any kind.

The Tennessee constitution doesn't constitutionally prohibit an income tax (unlike TX or FL), but the political consensus is strong against introducing one. Realistically, plan around no income tax for the foreseeable future. The state's revenue model is sales-tax-and-property-tax-heavy, which is regressive but politically stable.

What TN taxes instead: 7% state sales tax + 1.5–2.75% local options (combined 8.5–9.75% in metros), 0.48% average property tax, business franchise tax (0.25% of net worth, $100 minimum), and the largest source — sales tax. Combined state-and-local sales tax in Memphis hits 9.75%. Tennessee residents who consume heavily relative to income (younger, lower-income households) feel the sales tax bite more than HNW residents.

What you'll actually pay — two real-life scenarios

Two scenarios to anchor the math. The calculator at the top handles your specific number.

Illustrative — single filer unless noted, federal standard deduction, full-year TN residency, W-2 income unless specified. Two-earner MFJ households pay more FICA than the calculator shows. Ballparks, not invoices.

Scenario 1: Nashville healthcare professional, $95,000

Federal income tax	~$12,500
Tennessee state income tax	$0
FICA (Social Security + Medicare)	~$7,250
Total income taxes	~$19,750
Annual take-home	~$75,250
Effective income tax rate	~20.8%

Nashville healthcare professional — HCA, Vanderbilt Medical Center, LifePoint Health, or one of the dozens of Nashville healthcare-related operations. Same comp in California: ~$5,500 CA state tax. TN saves $5,500/year in state tax. Combined with Nashville's lower cost of living vs coastal cities, the take-home advantage is significant. The catch is housing — Nashville real estate has appreciated dramatically since 2018, narrowing the cost-of-living gap.

Scenario 2: Memphis logistics professional, $130,000 MFJ family

Federal income tax	~$11,850
Tennessee state income tax	$0
FICA (two earners)	~$9,950
Total income taxes	~$21,800
Annual take-home	~$108,200
Effective income tax rate	~16.8%

Memphis logistics / supply-chain professional family — FedEx HQ, AutoZone, International Paper, Smith & Nephew. Same income in IL would owe ~$6,400 state tax. TN's $0 saves real money for middle-income households. Memphis has among the lowest cost of living in any major US metro, amplifying the effective wage advantage. School quality varies enormously by district — Shelby County vs suburban Germantown / Collierville is a major difference.

Property tax + the sales tax stack

Tennessee property tax effective rates by county (approximate): Davidson (Nashville) 0.62–0.75%, Williamson (Franklin/Brentwood) 0.50–0.65%, Knox (Knoxville) 0.55–0.65%, Hamilton (Chattanooga) 0.60–0.75%, Shelby (Memphis) 1.20–1.35% (highest in TN due to school funding), Rutherford 0.55–0.70%. Statewide average ~0.48% — among the lowest in the country.

Sales tax is where TN gets you. Combined state + local rates: Nashville 9.25%, Memphis 9.75%, Chattanooga 9.25%, Knoxville 9.25%, Franklin 9.75%. Worth knowing because it compounds on consumption-heavy budgets. Senior tax-relief programs and food-only sales-tax-free holidays partially offset for lower-income residents.

Things financially comfortable Tennesseans actually do

Max your 401(k) ($24,500 in 2026) — pre-tax for federal. The federal savings still apply (~$5K–$8K/year) even though there's no state tax to defer.
Max your HSA if eligible — pre-tax for federal.
Backdoor Roth IRA — fully legal.
Mega backdoor Roth if your employer's 401(k) plan allows after-tax contributions.
TNStars 529 (Tennessee's own) — TN doesn't offer a state-tax deduction (no state tax to deduct), so shop any 529 plan for the lowest fees.
Property tax freeze for seniors — TN counties offer property tax freeze programs for homeowners 65+ with income under specified limits. Apply through your county trustee.
Sales tax holidays — annual back-to-school holiday (typically late July), occasional gun safety holidays. Plan large purchases around these for meaningful savings on big-ticket items.
If you're a remote worker for an out-of-state employer: TN doesn't tax your income. Some states (NY especially) may try to claim your wages under convenience-of-employer rules — verify your specific situation with a CPA.

Real questions people actually ask

Q: Did Tennessee really repeal the Hall Income Tax?

Yes. The Hall Income Tax (a 6% tax on dividend and interest income that applied for over a century) was on a phased repeal — 5% in 2017, 4% in 2018, 3% in 2019, 2% in 2020, 1% in 2021, fully eliminated effective 2022. So Tennessee residents now pay zero state income tax on any type of income, including investment income.

Q: Will Tennessee ever add a state income tax?

Highly unlikely in any near-term scenario. The Tennessee constitution has been amended (Article II, Section 28) to bar income tax on wages and salaries — making it constitutionally durable. Even if politics shifted, repeal would require a constitutional amendment.

Q: I work remotely for a NY employer from Nashville. Do I owe NY tax?

Almost certainly yes, under NY's convenience-of-employer rule. Unless your NY employer formally requires (in writing) that you work from TN for the employer's necessity (not your convenience), NY treats your wages as NY-source income. You'll file a NY non-resident return and pay NY state tax on your wages. TN has no income tax to credit against, so this is pure NY tax with no offset. Talk to a CPA about your specific situation.

Q: How does TN compare to FL for retirees?

Both have no state income tax. FL has lower property tax in most metros (FL ~0.83% vs TN ~0.48% — actually TN wins on property tax average). FL has stronger climate appeal (warm year-round). FL has Save Our Homes 3% assessment cap. TN has lower cost of living overall, especially Nashville suburbs and Knoxville. For pure tax minimization, both are excellent. For lifestyle, depends on weather preference.

Our honest opinion (which is just an opinion)

Tennessee is a strong tax-minimization state with constitutional durability and a particularly retirement-friendly profile. The trade-off is the high sales tax (especially in Memphis at 9.75%) and the cost-of-living gains in Nashville that have eaten into the original "cheaper than coastal cities" advantage.

The case for Tennessee:

Zero state income tax on wages, investment income, retirement income — full stop
Constitutional protection against future income tax
Property tax among the lowest in the country (~0.48%)
No state estate or inheritance tax
Strong economy: healthcare HQ corridor, music industry, logistics, corporate relocations
Cost of living lower than coastal alternatives (especially outside Nashville)
Music + outdoor lifestyle access

The case against:

Sales tax 9.25–9.75% in metros — among the highest in the country
Memphis property tax (~1.25%) is meaningfully above state average
Nashville housing has appreciated rapidly — cost-of-living gap with coastal cities has narrowed
Public school funding varies enormously by county (Shelby County underfunded)
Hot/humid summers

Honest take: TN is one of the best tax states in the country, period. The combined federal + property + (no-income) tax burden is among the lowest. For relocators from CA/NY/IL: substantial annual savings. For retirees: TN, FL, and TX form the three-way no-tax retirement choice — TN often wins on property tax and cost of living, FL wins on climate, TX wins on job market depth.

What now

Run your numbers in the calculator above. The TN line is $0. Add property tax for your specific county (use the Tennessee Comptroller's property tax lookup). If you're a remote worker for an out-of-state employer, verify with a CPA whether your employer's state has a convenience-of-employer claim on your wages. The biggest tax mistake most TN residents make isn't paying too much state tax — it's missing the property tax freeze (for seniors) or assuming a remote work setup is automatically TN-only.

Sources & further reading

A few honest notes

Not personal tax, legal, or financial advice. Verify with a licensed CPA, EA, or tax attorney before making meaningful decisions.
Tax law changes. This guide reflects 2026 IRS schedules and current TN Department of Revenue rules. The TN constitutional bar on personal income tax is durable but not absolute.
Property tax estimates vary by county and city — check your county tax assessor for your specific parcel.
Sales tax rates vary by location — verify your specific city + county combined rate.
The numbers are illustrative — scenarios don't include every credit, deduction, or wrinkle that might apply to you.
No client relationship is created by reading this page.

Last updated April 2026 with 2026 IRS schedules and current TN Department of Revenue guidance.