Tennessee Tax Policy & Rates 2026
Income tax, sales tax, property tax, and overall tax burden for Tennessee in 2026, with political context.
Yes
No Income Tax
None (Hall Tax eliminated 2022)
Income Tax Rate
#50
Tax Burden Rank (1=highest)
#13
Property Tax Rank (1=highest)
Tax Policy Overview
Tennessee eliminated the Hall Tax on investment income in 2022, becoming effectively a no-income-tax state. Funded by one of the highest state sales taxes in the nation plus local additions. Tennessee has the lowest overall tax burden of any state.
Key Tax Rates
| Tax Type | Rate / Status |
|---|---|
| Income Tax | None (Hall Tax eliminated 2022) |
| No Income Tax | Yes |
| Sales Tax | 7.0% (+local up to 9.75%) |
| No Sales Tax | No |
| Corporate Tax | 6.5% |
| Property Tax Rank | #13 nationally (1=highest) |
| Overall Tax Burden Rank | #50 nationally (1=highest) |
Political Context
Tennessee Republicans celebrated eliminating the Hall Tax. The state’s no-income-tax model is a key selling point for in-migration from high-tax states. The high sales tax is regressive but politically popular because it falls on consumption rather than income. Tennessee competes directly with Florida for wealthy relocating residents.