Tennessee Tax Guide 2026

Tennessee Income Tax Overview

Tennessee is one of nine states with no state income tax, making it one of the most attractive states for wage earners in the US. Workers in Tennessee owe only federal income tax on their wages — keeping significantly more of each paycheck compared to residents of high-tax states like California (13.3%) or New York (10.9%). For a Tennessee resident earning the state median income of $60,560, the absence of state income tax saves approximately $3,089 per year compared to paying the national average state income tax rate.

Tennessee Sales Tax Rate 2026

Tennessee's combined sales tax rate is 9.55%, which includes a state rate plus an average local rate. On a $100 purchase, you pay $9.55 in sales tax — and $47.75 on a $500 purchase. Rates can vary within the state based on county and city jurisdiction.

Property Taxes in Tennessee

Tennessee homeowners pay an effective property tax rate of 0.60% annually. On the Tennessee median home price of $340,000, that means approximately $2,040 per year — or $170 added to your monthly mortgage payment. Tennessee's property tax rate is near the national average of 1.07%.

Total Tax Burden for Tennessee Residents

When calculating the total tax burden for a Tennessee household earning $60,560 annually, you must add: federal income tax (approximately $7,267), FICA taxes (7.65% = $4,633), zero state income tax, and property taxes if you own a home. Use the specific calculators above to get your exact personalized numbers based on your income, filing status, and situation.

Tax Tips for Tennessee Residents in 2026

• No state income tax withholding on your paycheck — your W-4 only covers federal taxes
• Consider a Traditional IRA or 401(k) to reduce federal taxable income since you can't reduce state tax
• Watch out for Tennessee's property taxes when budgeting for homeownership
• Sales tax of 9.55% applies to most purchases — factor this into your budget