January 9, 2024

Tennessee: Who Pays? 7th Edition


Silhouette of Tennessee

Tennessee

Download PDF

Chart: Total Taxes for Tennessee
Chart: Sales & Excise Taxes for Tennessee
Chart: All Other Taxes for Tennessee
Chart: Property Taxes for Tennessee
All figures and charts show 2024 tax law in Tennessee, presented at 2023 income levels. Senior taxpayers are excluded for reasons detailed in the methodology. Our analysis includes nearly all (99.3 percent) state and local tax revenue collected in Tennessee.

State and local tax shares of family income

Top 20%
Income Group Lowest 20% Second 20% Middle 20% Fourth 20% Next 15% Next 4% Top 1%
Income Range Less than $21,700 $21,700 to $41,500 $41,500 to $71,700 $71,700 to $129,000 $129,000 to $245,400 $245,400 to $661,600 Over $661,600
Average Income in Group $12,600 $30,500 $53,300 $96,300 $161,400 $367,000 $2,018,200
Sales & Excise Taxes 9.6% 8.6% 7.7% 6.1% 4.9% 3.2% 1.7%
General Sales–Individuals 5.4% 5% 4.5% 3.6% 2.8% 1.6% 0.4%
Other Sales & Excise–Ind 1.8% 1.4% 1% 0.7% 0.6% 0.3% 0.1%
Sales & Excise–Business 2.5% 2.3% 2.1% 1.8% 1.6% 1.3% 1.2%
Property Taxes 2.7% 1.9% 2% 2% 1.7% 1.6% 1.2%
Home, Rent, Car–Individuals 2.4% 1.5% 1.7% 1.8% 1.4% 1.1% 0.3%
Other Property Taxes 0.3% 0.3% 0.3% 0.3% 0.3% 0.4% 0.9%
Income Taxes 0.2% 0.2% 0.2% 0.2% 0.2% 0.3% 0.7%
Personal Income Taxes 0% 0% 0% 0% 0% 0% 0%
Corporate Income Taxes 0.2% 0.2% 0.2% 0.2% 0.2% 0.3% 0.7%
Other Taxes 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% 0.1%
TOTAL TAXES 12.8% 10.9% 10.2% 8.6% 7.1% 5.3% 3.8%
Individual figures may not sum to totals due to rounding.

ITEP Tax Inequality Index

ITEP’s Tax Inequality Index measures the effects of each state’s tax system on income inequality. According to this measure, Tennessee has the 3rd most regressive state and local tax system in the country. Income disparities are larger in Tennessee after state and local taxes are collected than before. (See Appendix B for state-by-state rankings and the report methodology for additional detail.)

Tax features driving the data in Tennessee

Levies a business franchise tax
Levies a corporate income tax
Real estate transfer tax does not include higher rate on high-value sales
State sales tax base includes groceries, though taxed at a lower rate
Does not use combined reporting as part of its corporate income tax
Comparatively high combined state and local sales tax rates
No tax credits to offset sales, excise, and property taxes
Comparatively high reliance on sales and excise taxes
Does not levy a tax on estates or inheritances
Local sales tax bases include groceries
No personal income tax