Tennessee Tax Guide (2026)
Comprehensive statutory analysis of Tennessee individual income tax rates, Department of Revenue filing forms, extension guidelines, telecommuting sourcing rules, and pass-through entity tax provisions.
Key Statutory Tax Parameters (Tennessee, 2026)
2026 Legislative & Statutory Highlights
Tennessee fully repealed its historical 'Hall Income Tax' on interest and dividends, making Tennessee 100% free of individual personal income taxes. State funding is generated through a 7.0% state general sales tax (plus local sales surcharges up to 2.75%) and business Franchise & Excise taxes.
Tennessee does not levy a state personal income tax on earned wages. Tax parameters are indexed annually or enacted through state legislative sessions. Taxpayers should ensure that adjustments for federal bonus depreciation, Section 179 expensing, and Net Operating Loss (NOL) carryforwards follow Tennessee's specific rolling or static Internal Revenue Code conformity date.
Filing Forms, Deadlines & Extension Guidelines
Multi-State Workers & Telecommuting Sourcing Rules
Remote workers residing in Tennessee owe zero state income tax on all wage earnings.
Pass-Through Entity (PTE) Tax & Small Business Rules
N/A for personal income tax. Entities pay the Tennessee Franchise & Excise Tax (6.5% excise tax on net earnings).
Estate & Inheritance Tax
Tennessee has no state estate tax and no inheritance tax (repealed effective 2016).
Local & County Taxes
Local personal income taxes on wages are prohibited under the Tennessee state constitution.
Worked Tax Example: $120,000 W-2 Earner in Tennessee
A single professional in Nashville earning $120,000 pays $0 in state personal income tax, saving thousands annually compared to high-tax states.
Calculate Your 2026 Tennessee Tax Liability
Enter your taxable income, filing status, and municipal details below to calculate your customized state tax liability and print your executive summary.
No broad-based individual income tax. The prior Hall tax on investment income was fully repealed as of 2021, so Tennessee effectively has no individual income tax.
2026 Executive Tennessee State Tax Audit Summary
Not tax, legal, or financial advice
FiscTalk provides general educational information from public sources. Your tax results depend on the full set of facts, your filing history, and the jurisdiction-specific rules that shift yearly. Before filing or making decisions, consult a licensed CPA, EA, or attorney. FiscTalk is not a fiduciary and is not affiliated with the IRS or any state agency.
Sources & methodology
Frequently Asked Questions: Tennessee Taxes
Source-verified — not professional advice
Every figure on this page is checked in-house against its primary source — IRS revenue procedures and publications, state Departments of Revenue, and the text of the underlying statute — before publication. Last reviewed 2026-10-20. The full source list is at the bottom of this page. If you spot an error, see our corrections & standards policy.
Not tax, legal, or financial advice
FiscTalk provides general educational information from public sources. Your tax results depend on the full set of facts, your filing history, and the jurisdiction-specific rules that shift yearly. Before filing or making decisions, consult a licensed CPA, EA, or attorney. FiscTalk is not a fiduciary and is not affiliated with the IRS or any state agency.
Sources & methodology