Tennessee Tax Climate for Retirement

Tennessee has a significant program to attract retirees to the state, and thus has a very friendly tax climate for retirement. For starters, Tennessee is one of the few states that does not have a state income tax. Although it used to tax dividends and interest, that was phased out after 2020. Bottom line, as a retiree you will probably be better off tax-wise retiring in Tennessee than almost any other state. For more information go to taxes in Tennessee.


Overall Tax Burden

Tennessee's state and local tax burden is one of the lowest in the U.S. The Tax Foundation estimates its total tax burden at 8.3% of income, 44th highest nationally.


Income Tax

Tennessee no longer has any form of state income tax.


Pension income is not taxed

Pension income is not taxed.


Property Tax

Per capita property taxes are some of the lowest in the U.S.


Sales Tax

Tennessee charges 7% sales tax, higher than average. On top of that some towns add an additional sales tax. Cigarette and gasoline taxes are lower than average.


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