Tennessee (TN) Tax Rates — 2026

Income Tax None

Sales Tax 9.55%

Property Tax 0.56%

Income Tax

No State Income Tax

Sales Tax

State Rate7%

Avg Local Rate2.55%

Combined Rate9.55%

Groceries: Taxed

+2.98% vs national avg

Property Tax

Effective Rate0.56%

Median Annual Tax$1,220

-0.51% vs national avg (1.07%)

Retirement Income Tax

Social SecurityNO

PensionsEXEMPT

401(k) / IRANO

Estate & Inheritance Tax

Has Estate Tax: NO

Corporate Tax

Corporate Income Tax Rate: 6.5%

Additional Notes

No state income tax. Tennessee fully repealed its Hall Tax on interest and dividends in 2021. Has one of the highest combined sales tax rates in the country. Groceries are taxed at a reduced state rate of 4%.

Compare with another state:

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Best for Retirees

Sources: Tennessee Department of Revenue; Tax Foundation, Facts & Figures 2025; IRS Publication 17.