Quick Links: Local Tax | State Taxes

Tennessee is one of the lowest-taxed states in the nation - for both businesses and individuals. Couple that with competitive corporate incentives at both the state and local levels, low real estate costs, low shipping costs, low utility costs, and a low cost of living, you can see why Memphis is one of the nation’s top cities for corporate relocations and expansions.

Local Taxes

Tax Jurisdiction Rate
Property Tax Rates Shelby County $4.11 per $100 value
City of Memphis $3.40 per $100 value
City of Memphis
(Residents and Businesses)
$7.51 per $100 value
*Note: Memphis residents & businesses pay Shelby County rate plus city rate ($4.11 + $3.40 = $7.51).
Shelby Co. Municipalities
Arlington $1.15 per $100 value (plus Shelby Co. tax)
Bartlett $1.62 per $100 value (plus Shelby Co. tax)
Collierville $1.78 per $100 value (plus Shelby Co. tax)
Germantown $1.93 per $100 value (plus Shelby Co. tax)
Lakeland $1.40 (plus Shelby Co. tax)
Millington $1.53 (plus Shelby Co. tax)
Property Tax Ratio of Assessment Residential Memphis 25%
Shelby Co. 25%
Commercial & Industrial Real Memphis 40%
Shelby Co. 40%
Commercial & Industrial Personal Memphis 30%
Shelby Co. 30%
Local Sales Tax
(In addition to 7.0% state sales tax) 
Shelby County, including Memphis Shelby County: 2.25%
Memphis: 2.25%
Arlington: 2.75%
Bartlett: 2.75%
Collierville: 2.75%
Germantown: 2.75%
Lakeland: 2.75%
Millington: 2.75%
Gross Sales Receipts Tax Rate varies -- 1/9 of 1% to 3/20 of 1%
Payroll (Occupational) Tax None
Head Tax None
Hotel Tax 14.25% (additional 5% added to 9.25% state + local sales tax rate)


State Taxes

Tax Rate
Sales Tax 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 5%, expect 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 - details available upon request.
Property Tax None
Corporate Excise Tax 6.5% on net income from business conducted in Tennessee
No Throwback Provision: Sales made outside of the State of Tennessee are not taxed
Franchise Tax Equity Method: $0.25 per $100, or major fraction thereof, of the issued and outstanding capital stock, surplus and undivided profits; minimum $100
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
Unemployment Compensation Tax 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.
Inventory Tax None on finished goods inventory
Personal Income Tax No income tax on wages
Hall Income Tax Taxable dividend and interest incomes are taxed at the rate of 6%. 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 $26,200 or less, or $37,000 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.**)