Tennessee charges no state income tax on wages. Here is what that means for your paycheck, plus how it compares nationally.
Last updated: May 2026 · Data: state revenue departments, IRS, BLS
Tennessee is one of nine U.S. states with no state income tax on wages. There are no income tax brackets to report. 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 The state previously taxed interest and dividend income (the Hall Tax), but this was fully repealed as of January 2021.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.
No state income tax is withheld from Tennessee paychecks. Workers keep more of every dollar than residents of states that tax income.
The nine states with no income tax on wages are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Because Tennessee has no state income tax, there is no state standard deduction to apply. You still claim the federal standard deduction on your federal return: $15,000 (single) or $30,000 (married filing jointly) for 2026.
| Benchmark | Top Marginal Rate |
|---|---|
| Tennessee (2026) | 0% |
| National average - all 50 states | 4.86% |
| National average - 41 states with an income tax | 5.93% |
| Highest in the U.S. (California) | 13.3% |
| Lowest among states that tax income | 2.5% |
| States with no income tax | 0% (9 states) |
Tennessee levies no income tax, placing it among the nine lowest-tax states in the nation for wage earners.
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.
| Tennessee Tax Snapshot | 2026 |
|---|---|
| Top Income Tax Rate (2026) | 0% |
| Income Tax Structure | None |
| State Sales Tax | 7% |
| Minimum Wage | $7.25/hour |
| Median Household Income | $63,000 |
| Tax Agency | Tennessee Department of Revenue |
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See how nearby states tax income in 2026:
No. Tennessee is one of nine states with no state income tax on wages and salaries 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 The state previously taxed interest and dividend income (the Hall Tax), but this was fully repealed as of January 2021.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.
Yes. Residents of Tennessee still owe federal income tax and FICA (Social Security and Medicare) to the IRS. Only the state-level income tax is zero.
There is no state standard deduction because there is no state income tax. On your federal return you can still claim the 2026 federal standard deduction of $15,000 (single) or $30,000 (married filing jointly).
Tennessee is often considered tax-friendly because wage and salary income is not taxed at the state level. Consider sales tax, property tax, and cost of living for the full picture.
While the national average top income tax rate is 4.86% across all 50 states, Tennessee charges 0%. Only eight other states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming) also levy no wage income tax.