The state only taxes investment income from stocks and bonds (at a flat rate of 5%). 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 for that income. However, if you have already filed your return and need to correct or change any information to that return, you will need to file a tax amendment. Click the link below for information on how to amend a Tennessee return.
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 5% 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).
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%.
Tennessee holds one annual sales tax holiday, which usually occurs on the last Friday in July and ending at the end of the following Sunday. During this holiday, 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 2019. We will update it as soon as the dates are available.
- 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 Tennessee 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.
Tennessee State Tax Agency Contacts
You can contact the Tennessee Department of Revenue at (800) 342-1003.
For more information on Tennessee state income taxes, you can visit the website of the Tennessee Department of Revenue.
See other U.S. States, Territories, and Protectorates.