Tennessee has no state income tax. Use this calculator to estimate your federal income tax and FICA contributions for 2026.
Tennessee has no state income tax on wages or salaries. The state previously taxed interest and dividend income (the Hall Tax), but this was fully repealed as of January 2021. Tennessee relies on its 7% sales tax for revenue.
Tennessee has the highest combined state and local sales tax rate in the country, averaging over 9.5% when local taxes are included. However, the state has no income tax, making it favorable for high earners.
Because Tennessee has no state income tax, residents only pay federal income tax and FICA payroll taxes. This can result in significant savings compared to states with income tax rates of 5% or higher. The calculator above shows your total tax burden as a Tennessee resident.
Sales Tax: 7.0%. Local jurisdictions may add additional sales tax.
Even without a state income tax, Tennessee residents still pay federal income tax. Here are the 2026 brackets for single filers:
| Rate | Single Filer Income Range |
|---|---|
| 10% | $0 – $11,925 |
| 12% | $11,925 – $48,475 |
| 22% | $48,475 – $103,350 |
| 24% | $103,350 – $197,300 |
| 32% | $197,300 – $250,525 |
| 35% | $250,525 – $626,350 |
| 37% | Above $626,350 |
Standard deduction: $15,000 (single), $30,000 (married filing jointly).
Source: IRS Revenue Procedure for tax year 2025.
| Tax | Rate | Wage Base |
|---|---|---|
| Social Security | 6.2% | First $168,600 |
| Medicare | 1.45% | All wages |
| Additional Medicare | 0.9% | Wages above $200,000 |
The minimum wage in Tennessee for 2026 is $7.25/hour, which follows the federal minimum. Federal rate (no state minimum) Full-time annual equivalent: approximately $15,080/year.
The median household income is approximately $63,000. With no state income tax, Tennessee residents keep more of their earnings compared to residents of income-tax states at the same salary level.
| Item | Cost | Frequency |
|---|---|---|
| Articles of Organization Filing | $300 | One-time |
| Annual report | $300 | Yearly |
| Registered Agent | $0 – $150/yr | Yearly |
Source: Tennessee Secretary of State.
Northwest Registered Agent handles all the paperwork for $39 + state fee. Includes free registered agent service for the first year.
Start My Tennessee LLCNo. Tennessee has no state income tax on wages or salaries. The state previously taxed interest and dividend income (the Hall Tax), but this was fully repealed as of January 2021. Tennessee relies on its 7% sales tax for revenue.
Tennessee residents pay federal income tax, FICA taxes (Social Security and Medicare), and state sales tax of 7.0%. Property taxes also apply.
The minimum wage in Tennessee for 2026 is $7.25 per hour. Federal rate (no state minimum)
Filing an LLC in Tennessee costs $300 for the Articles of Organization. Annual report: $300.
With no state income tax, Tennessee is popular among retirees looking to minimize their tax burden. However, the state has a relatively high sales tax of 7.0% that affects everyday spending.