Understanding Personal Income Tax in Tennessee
Tennessee does not tax salaries and wages, but does impose a tax on certain other types of personal income.
Tennessee does not tax salaries and wages.
In Tennessee an income tax is imposed on qualified income at the rate of 6 percent. Qualified income consists of dividends from stocks and interest from qualified bonds and other obligations. Interest from commercial paper, short term trade acceptances, and certificates of deposit, etc. are not subject to the income tax.