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Tennessee Tax Burden Among Nation’s Lowest

Wednesday, October 24, 2012

The latest installment of an annual ranking from Tax Foundation finds Tennesseans enjoy the third lowest tax burden in the United States. The study combines both local and state tax rates to find the local tax burden.

Tennesseans have long enjoyed their status as one of just a handful of states with no state income tax, a factor that has made it a prime contender for business expansions and recruitment.

“The absence of a major tax is a dominant factor in vaulting many of these ten states to the top of the rankings,” the study concluded.

Tennessee’s state-local tax burden is 7.7% according to the study, well below the national average of 9.9%. In 2011, the same group found Tennessee’s tax burden a tick higher, at 7.8%. The Volunteer State has remained among the ten lowest tax burdens in the country since 1977 according to the Tax Foundation.

As indicated in the map below, the Tax Foundation found New York, New Jersey, and Connecticut the three highest taxed states in terms of tax burden.

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