Tennessee has the second lowest state and local tax burden per capita and no income tax on wages. Combine that with some exceptional incentives from our economic development partners for relocating and expanding companies and your business is ready to grow in the Memphis region.
$4.05 per $100 value
$3.19 per $100 value
*Note: Memphis residents & businesses pay Shelby County rate plus city rate ($4.05 + $3.19 = $7.24).
$1.15 per $100 value
$1.83 per $100 value
$1.83 per $100 value
$1.95 per $100 value
$1.25 per $100 value
$1.53 per $100 value
All municipality taxes are in addition to Shelby County tax.
25%
25%
40%
40%
30%
30%
2.25%
2.75%
2.75%
2.75%
2.75%
2.75%
2.75%
2.75%
*In addition to 7.0% state sales tax.
Rate varies — 1/9 of 1% to 3/20 of 1%
14.25% (additional 5% added to 9.25% state + local sales tax rate)
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7.0% (added to local option sales tax, so total sales tax in Shelby Co. is 7.0% + 2.25% = 9.25%)
The state tax rate on food is 4%, except for food purchased in restaurants.
The single article rate is 2.75% on any single item sold in excess of $1,600, not to exceed $3,200.
*Exemptions include industrial machinery, items bought for resale and manufacturers’ exemption for materials that become a component part of the finished product, containers, labeling and packaging; and materials coming into direct contact with the product and consumed in the manufacturing process. Numerous other exemptions are available, please contact us for more information.
There is no property tax in Tennessee.
6.5% on net income from business conducted in Tennessee
No Throwback Provision: Sales made outside of the State of Tennessee are not taxed
Equity Method: $0.25 per $100, or major fraction thereof, of the issued and outstanding capital stock, surplus and undivided profits; minimum $100
OR
Book Value Method: $0.25 per $100 on book value of all real and tangible goods owned or used by the corporation in Tennessee. Same rate applies to finished goods inventory for distribution facilities, but caps at $30 million
Varies: The first $8,000 in wages paid to each employee are subject to this tax. The new employer premium rate for most industries, including manufacturing sector 31, is 2.7%. The rate is higher for construction (7.5%), mining and extraction (5.0%), manufacturing sector 32 (5.0%), and manufacturing sector 33 (6.5%). Minimum and maximum experience rates are 1.0% and 10.6%, respectively.
None on finished goods inventory.
No income tax on wages.
Taxable dividend and interest incomes are taxed at the rate of 4%. The first $1,250 on an individual return and the first $2,500 on a joint return are not taxed. Any person 65 years of age or older having a total annual income derived from any and all sources of $37,000 or less, or $68,000 or less for joint filers are completely exempt from the tax.
Phased out by 2022. The tax will decrease by 1% each year starting in 2017.
Questions? Click here for more information.
Greater Memphis Chamber | 22 North Front Street Suite 200 | Memphis, TN 38103-2100 | 901-543-3500
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