Tennessee Taxes 2025
Complete tax guide and OBBBA calculator for TN residents
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Tennessee Tax Overview 2025
State Income Tax
0%
None rate structure
Combined Sales Tax
9.55%
State 7.00% + Local 2.55%
Avg Property Tax
0.71%
Below average property taxes
No State Income Tax!
Tennessee is one of only 9 states with no personal income tax. Combined with federal OBBBA deductions, TN residents enjoy significant tax advantages compared to residents of high-tax states.
💼 Tennessee Income Tax 2025
Tennessee has no state income tax on wages (eliminated Hall Tax on investment income in 2021).
Tennessee Income Tax Quick Facts
🛒 Tennessee Sales Tax 2025
Tennessee's combined average sales tax rate is 9.55%, which includes both state and local components. The state sales tax rate is 7.00%, while local jurisdictions add an average of 2.55%.
Sales Tax Breakdown
💡 Tip: Local sales tax rates vary by city and county. Your actual rate may be higher or lower depending on where you shop.
🏠 Tennessee Property Tax 2025
Tennessee's average effective property tax rate is 0.71%. Below average property taxes.
Property taxes in Tennessee are assessed at the local level by counties and municipalities. Rates can vary significantly between jurisdictions.
Example Annual Property Tax
| Home Value | Est. Annual Tax | Monthly |
|---|---|---|
| $250,000 | $1,775 | $148 |
| $400,000 | $2,840 | $237 |
| $600,000 | $4,260 | $355 |
OBBBA Tax Benefits for Tennessee Residents
Tennessee residents get double benefits - no state income tax plus federal OBBBA deductions. Nashville service workers especially benefit from tips deduction.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced several new federal tax deductions that Tennessee residents can claim starting with their 2025 tax returns.
Available OBBBA Deductions for TN Residents:
Calculate Your Tennessee Tax Savings
Use our free OBBBA calculator to see exactly how much you could save on your 2025 federal taxes as a Tennessee resident.
Calculate My SavingsHow Tennessee Compares
| Tax Type | TN Rate | US Average | Comparison |
|---|---|---|---|
| Income Tax (Top Rate) | 0% | 5.1% | No Tax |
| Sales Tax | 9.55% | 7.12% | Above Avg |
| Property Tax | 0.71% | 1.10% | Below Avg |
Frequently Asked Questions
What is the income tax rate in Tennessee?
Tennessee has a none income tax with rates of 0%. Tennessee has no state income tax on wages (eliminated Hall Tax on investment income in 2021).
What is the sales tax in Tennessee?
The combined average sales tax rate in Tennessee is 9.55%. This includes the state rate of 7.00% plus an average local rate of 2.55%.
How do OBBBA deductions benefit Tennessee residents?
Tennessee residents get double benefits - no state income tax plus federal OBBBA deductions. Nashville service workers especially benefit from tips deduction. Tennessee residents can claim tips, overtime, auto loan interest, SALT, and senior bonus deductions on their federal returns.
When are Tennessee taxes due?
For tax year 2025, Tennessee state taxes are due on April 15, 2026, the same date as federal taxes. Extensions may be available if you need more time to file.