If you have investment income from stocks and bonds (described in detail in the "TN Income Tax" section), you may have to file a Tennessee tax return. Though you cannot efile tax forms for this type of income on efile.com, you can work with one of our live, online Tax Professionals.
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Tennessee Tax Facts
TN Income Tax:
The TN state income tax doesn't apply to individual wages and salaries. However, most incomes from bonds, stocks, and receivable notes are taxed at a 6% flat rate. The first $1,250 in taxable income from a single filer is exempt and the first $2,500 of taxable income from a joint filer is exempt. Also, a tax exemption applies for taxpayers older than 65 who either have income less than $33,000 (single filers) or $59,000 (joint filers).
TN Sales Tax:
Tennessee has a general 7% sales and use tax rate. Food is taxed at 5.0%, but dietary supplements, prepared food, and candy are taxed at the general sales tax rate.
Sales tax is also collected at the local level. Rates vary from 1.5% to 2.75%.
More information on Tennessee Sales Tax
TN Sales Tax Holiday:
Tennessee holds one annual sales tax holiday which usually occur on the first weekend of August (midnight Friday through midnight Sunday). During this, certain items are exempt from Tennessee sales tax. However, TN consumers will only receive the tax exemption if a specific total spending limit is met.
Refer to the chart below for all Tennessee sales tax holidays for 2016. We will update this section when the dates are available.
|Sales Tax Holiday Dates||Sales Tax Holiday Items Included|
- Clothing - $100 or less (includes accessories and school uniforms)
- School supplies - $100 or less (includes backpacks, lunch boxes, and art supplies)
- Computers - $1,500 or less
TN Personal Property Tax:
Personal property tax assessments in Tennessee are based on a percentage of the property's fair market value as of January 1 of each Tax Year. This varies according to statutory classifications based on potential or actual use:
- Farm property: 25%
- Residential property: 25%
- Business personal property: 30%
- Commercial & industrial property: 40%
- Public utility property: 55%
Tax rates, set by the governing body of the city or county, are set at an amount per $100 of assessed value.
The state doesn't have a homestead exemption, but there's a property tax relief program for the elderly, disabled, and/or veterans.
Odd Tax Fact:
The state collects a "coin-operated amusement tax." The tax applies to "any coin-or token-operated game, machine, or device, which, as a result of depositing a coin, token, or other object, automatically or through some mechanical or electronic involving skill, chance, or a combination thereof, affords music, amusement, or entertainment without vending any merchandise." This license tax is imposed on all machines put into public play or use. An additional tax is collected per bona fide coin-operated amusement machine owned.
State Tax Agency:
For more information, you can visit the website of the Tennessee Department of Revenue.
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