Tennessee State Taxes: A Simple Guide
Tennessee does not tax most wage income at the state level, but it still has important taxes, especially sales and property taxes. This guide gives a high-level overview for individuals.
ℹ️Important: This is a general education guide. Tax rules and programs change over time. Always check official Tennessee guidance or talk with a tax professional for current details.
🎵State income tax basics
Tennessee does not impose a traditional state income tax on most wage and salary income for individuals. That generally means:
- ✓No Tennessee state income tax is withheld from your paycheck.
- ✓You typically do not file a separate Tennessee personal income tax return for wage income.
- ✓Your primary income tax filing is your federal Form 1040.
Note: Tennessee has had other limited taxes in the past (for example, on certain investment income). The details can change, so always verify the current rules.
🛒Sales and use tax
Tennessee relies heavily on sales and use taxes instead of a broad personal income tax. Key points:
- •There is a statewide sales tax on many retail purchases.
- •Local jurisdictions can add their own sales taxes, so the total rate varies by city and county.
- •Certain goods may be exempt or taxed differently under Tennessee law.
- •If you buy taxable goods from out of state or online and no tax is charged, you may owe use tax to Tennessee.
Businesses selling taxable goods or services in Tennessee usually must collect and remit sales tax to the state and applicable local jurisdictions.
🏡Property taxes
Property taxes in Tennessee are managed by counties and local governments. They are based on the assessed value of real property such as homes and land.
- •Homeowners receive property tax bills from their county or city.
- •Tennessee offers certain relief or exemption programs for qualifying taxpayers, such as some seniors or disabled homeowners.
- •Property taxes help fund local schools, infrastructure, and other public services.
Because property taxes are local, rates and available relief programs vary by jurisdiction. Check with your county or city tax office for details.
🔗Putting Tennessee taxes together
A typical Tennessee resident may encounter several types of taxes:
- •Federal income tax (Form 1040)
- •State and local sales and use taxes
- •Local property taxes if they own a home
Understanding federal basics like taxable income and how to file your taxes, plus this Tennessee overview, gives you a clearer picture of your total tax situation.