Does Tennessee have state income tax? What changes when you move to Franklin

Tennessee income tax at a glance (2026)

Does Tennessee have state income tax on your pay?

No, and for a mover that closes the question. The state has never taxed wages, its Hall tax on interest and dividends ended for tax years starting in 2021, and its inheritance tax doesn't apply to deaths after 2015. The numbers worth your time are the ones that replace income tax: 9.75% sales tax in Williamson County and the property tax on the home you buy.

Your first task is payroll. Ask HR to stop state withholding from your first Tennessee paycheck, and plan a part-year resident return for the state you left. Federal tax doesn't change with the move.

State income tax you leave behind: California, Illinois, New York, New Jersey

Each of these states taxes wages, and Tennessee doesn't, so the saving equals whatever your old state took. You don't need a rate table to find it: your own W-2 has the figure in box 17, and last year's state return has it to the dollar. That's the number Tennessee takes to zero.

California income tax vs Tennessee

Your saving is your California state tax line, all of it, from the first Tennessee paycheck. California is also one of five states whose movers must bring a motor vehicle record to get a Tennessee driver's license, so order it before you go. Our California to Tennessee move guide sets the housing side next to the tax side.

Illinois income tax vs Tennessee

The same arithmetic applies: box 17 on your Illinois W-2 is the saving. Illinois movers also need the motor vehicle record for the license. File an Illinois part-year return for the months before the move.

New York income tax vs Tennessee

If you change employers, the New York line on your pay stub disappears with the move. If you keep a New York employer and work from Franklin, ask a CPA before you assume it does.

New Jersey income tax vs Tennessee

Take your New Jersey state withholding from last year's W-2 as the saving, then file a part-year New Jersey return for the move year. If you sell a New Jersey home in the same year, ask your CPA which state return the gain lands on.

Texas and Florida movers: no income tax saving

Neither Texas nor Florida taxes wages, so a move from either one brings no income tax saving to offset Tennessee's sales tax. The comparison for those households is sales tax against sales tax and property tax against property tax. Texas and Florida homestead exemptions have no direct match here; Tennessee's relief programs and the county's tax freeze are explained in our guide to Williamson County property tax relief, and they come with age and income limits.

What you keep without a state income tax in Franklin

The state collects at the register instead, and the county through property tax. Fill in this sheet with your own numbers; the example column is an illustrative household, not a typical one.

Subtract the sales tax your old state charged on the same spending, since you paid some there too. Then run the property tax calculator for Williamson County on your price. Use Zillow's typical Franklin home value of $913,277 (September 2026) if you haven't picked a house, and check the parcel record: the rate depends on whether the parcel is inside the City of Franklin and the FSSD line, not on the mailing address.

Example household: the income tax saving after sales tax

In the example, the household stops paying $8,000 of state income tax and pays $3,802.50 of Williamson County sales tax on shopping and groceries. That leaves $4,197.50 before two adjustments: add back whatever sales tax the old state charged on the same spending, then subtract the difference in property tax. On a typical Franklin home inside the city and the FSSD, the bill is about $5,122, so before that add-back this household comes out ahead only if its old property tax was at least about $925 a year. Inside the city but outside the FSSD ($3,575), it's ahead even if it paid no property tax before.

Tennessee income tax calculator results

Paycheck calculators set to Tennessee show a state line of $0, which is correct and all they can tell you. The useful comparison is your old state's line against the sheet above, so skip the calculator and use your W-2.

Tennessee Hall income tax: what it was and when it ended

The Hall tax was Tennessee's tax on investment income, and it ended for tax periods beginning in 2021.

What the Hall income tax taxed

Enacted in 1929, it applied only to interest from bonds and notes and to dividends from stock. It was Tennessee's only individual income tax, and it never touched wages.

Hall tax phase-down from 2017 to 2021

Repeal covers tax periods beginning on or after January 1, 2021. If a calculator or article still shows a Tennessee line for dividends, it's using pre-2021 rules.

Does Tennessee tax retirement income or Social Security?

No. With no individual income tax left, nothing in a retirement paycheck is taxed by the state.

Social Security and Tennessee income tax

Social Security benefits owe no Tennessee tax. Federal rules on taxing benefits don't change with the move.

Retirement withdrawals: pensions, IRA and 401(k)

Pension checks and retirement account withdrawals owe no Tennessee tax either. If you're timing a large IRA withdrawal or Roth conversion around the move, the year you become a Tennessee resident matters for your old state's part-year return: plan it with a CPA.

Tennessee capital gains tax

There's no state tax on capital gains for individuals. Selling stock while living in Franklin owes the federal tax only. The money questions about retiring here, including property tax relief and the county's tax freeze, are on our best places to retire in Tennessee page.

Tennessee inheritance and estate tax

Tennessee inheritance tax ended after 2015

The state's inheritance tax isn't imposed on deaths after December 31, 2015, so no return is filed for a death in 2016 or later. Heirs of a Franklin homeowner owe the state nothing on the house or the accounts. Federal estate tax is separate and unchanged by where you live; an estate attorney can tell you whether it touches yours.

Income tax in your move year: a Franklin checklist

Stop state withholding with Franklin HR

Give HR your Tennessee address on day one. A payroll system that keeps withholding for your old state costs you a refund wait, and the money comes back only when you file.

File a part-year income tax return in your old state

Your old state taxes what you earned while living there. Keep the moving date, the lease or closing papers, and your new Tennessee license as proof of when residency changed.

Business owners and Tennessee taxes

If you own an LLC or a corporation, its Tennessee taxes are a separate question from your personal income tax. Settle it with a CPA before you move the business address.

For the full list of errands in order, start with our checklist for moving to Tennessee. Confirm your own move-year filing with a Tennessee CPA.

Is Tennessee tax-friendly once income tax is gone?

For wage earners and investors, yes. The catch is the register: 9.75% on general purchases and 6.75% on groceries in Williamson County, with a cap that lowers the rate on items above $3,200. Our Tennessee sales tax guide works that out item by item, and the county's property tax rates are in the Williamson County property tax guide. The trade favors you when your old W-2's state line is bigger than your Franklin sales tax plus any rise in property tax.