How Tennessee capital gains tax works
Tennessee has no general state income tax, so most capital gains are not taxed at the state level.
Tennessee has no state income tax, so capital gains are not taxed at the state level.
You will still owe federal capital gains tax — this calculator estimates the state portion only.
Federal tax still applies
The IRS taxes long-term gains (assets held over a year) at 0%, 15% or 20% depending on income, and short-term gains as ordinary income.
So even in a no-income-tax state, selling an investment at a profit usually creates a federal tax bill.
Frequently asked questions
Does Tennessee tax capital gains?
Tennessee has no general state income tax, so most capital gains are not taxed by the state. Tennessee has no state income tax, so capital gains are not taxed at the state level.
What is the capital gains tax rate in Tennessee?
There is no state capital gains rate in Tennessee for ordinary investors. Federal rates of 0%, 15% or 20% still apply.
Are long-term gains taxed lower in Tennessee?
Tennessee has no state income tax, so capital gains are not taxed at the state level.
Does this include federal capital gains tax?
No. This estimates the TN state tax only. Federal capital gains tax is separate and applies on top.