Tennessee

Salaries, wages, Social Security, IRAs and pension income are not taxed. A 6% tax is levied on stock dividends and interest from bonds and other obligations. The first $1,250 in taxable income received by a single filer is exempt ($2,500 for joint filers).
Retirement Income Taxes: Persons over 65 with a total income of less than $16,2000 (single filer) or $27,000 (joint filer) are exempt from the above tax.
Retired Military Pay: See above.
Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.

Sales Taxes

State Sales Tax: 7% on tangible property (prescription drugs exempt); 6% on food and food ingredients. Counties and cities may add another 1.5% to 2.75% to the total of either rate (click here).
Gasoline Tax: * 21.4 cents/gallon
Diesel Fuel Tax: * 18.4 cents/gallon
Gasohol Tax: * 21.4 cents/gallon
Cigarette Tax: 62 cents/pack of 20; 77.5 cents/pack of 25
* Tax rates to do not include local option tax of 1 cent.

Tennessee does not have a homestead exemption. However, there is a property tax relief program for the elderly, disabled and veterans. Click here. The assessed valuation of a property is based on 25% of its fair market value. Depending on the location of the residence, homeowners will be assessed property taxes from the city only, the city and county, or the city, county, and a special school/fire district rate. A local government may authorize (at their option) a person who is 65 years of age or older to defer payment of tax up to $60,000 of the appraised fair market value of the homeowners residence if the combined income is not more than $12,000. Local option could increase it to $25,000. For more information, call 615-741-4883 or click here for an overview of property taxes..

There is an inheritance tax in which all real and personal property in which the decedent owned or has an interest is taxed. It ranges from 5.5% to 9.5% of the value of the property transferred at death. Spouses are exempt. For 2006, any amount over $1,000,000 is taxed. The estate tax is limited and related to federal estate tax collection.
For further information, visit the Tennessee Department of Revenue site or call 615-741-2837.