Tennessee state tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact residents.
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Although Tennessee has one of the highest sales tax rates in the U.S., relatively low property taxes compared to other states, Tennessee has no income taxes, and a generally low cost of living.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, and the Sales Tax Handbook. Property taxes are cited as a rate percentage rather than the assessed value.]
There is no income tax in Tennessee. The state previously taxed income earned from stocks and bonds, but this tax was repealed in 2021.
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Tennessee has a 7% statewide sales tax. There's also an additional state tax of 2.75% on sales of single items that applies to the portion of the sales price from $1,600 to $3,200. Localities can add up to 2.75%, with an average combined state and local rate of 9.55%, according to the Tax Foundation.
Tennessee's property tax rate is below the national average. The average effective property tax rate in Tennessee is 0.48%, according to the Tax Foundation.
Tennessee Property Tax Breaks for Retirees
Property Tax Relief Program: Tennessee has a property tax relief program that reimburses income-eligible adults age 65 or older for taxes paid on their primary residence.
Note: Veterans with disabilities and their surviving spouses (of any age) might also qualify for the Tennessee property tax relief program.
Property Tax Freeze: There's also a property tax freeze program available for eligible Tennessee residents. If approved, homeowners can have their tax-assessed value frozen, preventing tax increases in following years. Homeowners must meet specific criteria to qualify.
Gasoline: $0.20 per gallon.
Diesel: $0.17 per gallon.
Tennessee tobacco taxes
Swipe to scroll horizontally| Product | Tax Amount |
|---|---|
| Cigarette | $0.62 per pack |
| Other Tobacco Products | 6.60% of wholesale price |
Tennessee alcohol taxes
Swipe to scroll horizontally| Product | Tax Amount |
|---|---|
| Wine | $1.21 per gallon |
| Beer | $1.29 per gallon |
| Liquor | $4.40 per gallon |
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Former Tax WriterKatelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.
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