Personal Income Taxes
Tennessee does not tax earned income. A 6% tax is levied on dividends and bond interest received by individuals or other entities, including partnerships and trust. All persons or entities domiciled in Tennessee or residing in the state more than six months in a particular tax year must pay the tax if taxable dividends or interest are received. The first $1,250 on an individual return and $2,500 on a joint return are exempt from the tax.