Tennessee Tax Structure

This data is provided by the Blount County Economic Development Board. We offer detailed analysis of our region through our GIS - Customized Site Selection System.

The Tennessee Constitution mandates a balanced budget and forbids deficit financing for government operations. This "pay as you go" plan means that new businesses and individuals moving to Tennessee will never be taxed by the state to pay for old debts. Tennessee taxes as a percent of personal income was second lowest for all States in the Southeastern region and 17% lower than the U.S. rate. Tennessee’s per capita taxes of $1,106 in Fiscal 1994 was second lowest among southeastern states and 23% lower than the U.S. rate. Tennessee offers a tax structure that is competitive and provides a cost effective place to live and operate their businesses. The following summarizes taxes and incentives of interest to corporations:

Summary of Tennessee Business Taxes

	Tax	State	Local
Corporate/Excise	6.5%	None	None
Franchise	$0.25 per $100	None	None
Sales and Use	7.0%	1.0%-2.75%	None
General Property	None	$.10-$3.89/ $100 of assessment (city) $1.42-$5.17/ $100of assessment (county)	None
Initial Corporate Organization Fee	None	$100-$600	None
Utility Gross Receipts	None	3.0%	None
Income Tax	None	6.0% of interest, dividends	None
Unemployment Insurance	None	2.7% new employers	None
Most Manufacturer's pay	None	7.5%	None
Local Business Tax	None	Up to 1/8 of 1.0% gross sales	None

Source: Tennessee Department of Revenue & Tennessee Department of Economic & Community Development

Comparative Tax Burden

	State Taxes Per Cap	State Tax Collections (Billions)	Personal Income (Millions)	Population (Million)
Tennessee	$1,345	$7.8	$153.6	5.7
South Carolina	1,400	5.8	99.9	4.0
Florida	1,485	24.8	467.2	16.0
Virginia	1,752	12.8	232.1	7.1
Georgia	1,609	13.8	238.4	8.2
United States	1,854	533.4	8,621.0	292.2
Alabama	1,533	6.9	109.0	4.5
Louisiana	1,639	7.4	107.6	4.5
North Carolina	1,867	15.5	224.5	8.1
Mississippi	1,647	4.7	61.9	2.9
Kentucky	1,948	8.0	101.9	4.0
Arkansas	1,858	5.0	61.7	2.7
West Virginia	1,971	3.6	41.0	1.8

Source: Bureau of Economic Analysis, Survey of Current Business

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