Quick Tennessee Tax Stats
| Tax Type | Rate / Info |
|---|---|
| Income Tax | 0% (no state income tax on wage income) – Hall Tax on interest/dividends repealed as of 2021 |
| Sales Tax | 7% statewide base; ~9.25% combined in many local jurisdictions |
| Jock Tax | No state income tax on wage income; athletes still pay jock tax in other states |
| Cost of Living (Range) | $60,000 – $135,000 annual for single-person moderate-to-high lifestyle |
| Average Home Price | ~$350,000 (3-bed/2-bath home in Nashville / suburban areas) |
Income Tax in Tennessee
Tennessee is one of the few U.S. states with no state income tax on earned income. The state formerly imposed the “Hall Tax” on interest and dividend income, but that was fully phased out by 2021.
For professional athletes, this means:
- Higher net cash on contracts: Salaries, signing bonuses, and endorsements are not reduced by state income tax.
- Residency planning benefits: Athletes domiciled in Tennessee can retain a larger share of their gross earnings compared to states that levy personal income tax.
- Net worth growth: Without state income tax on salary or investment income, athletes can accelerate wealth accumulation, particularly when combined with disciplined investment strategies.
Example
An MLB player earning $28 million annually in salary and endorsements while residing in Tennessee avoids a state income tax bill that could range from $2.5–$6 million in states like Michigan, Colorado, or Virginia.
With no income tax drag on either active or passive earnings, Tennessee residency provides a net income advantage that compounds over time.
Sales Tax
Tennessee has one of the highest combined sales tax burdens in the U.S., with a 7% state rate and local surtaxes pushing combined rates commonly to ~9.25% in areas like Nashville and Memphis.
Athletes and high-income consumers can manage the impact by:
- Timing large discretionary purchases during tax-free holidays.
- Making certain purchases in lower combined rate jurisdictions within the state.
- Planning major transactions with sales tax in mind.
Example
Purchasing a $180k performance vehicle in the Nashville metro could result in ~$16,650 in combined sales taxes at a 9.25% total rate.
Jock Tax
Although Tennessee imposes no wage or earned income tax, professional athletes still face jock tax obligations in states where they play away games if those states levy personal income tax.
In practice:
- Tennessee residency ensures home game income is untaxed state wise.
- Away game earnings are apportioned and taxed by states like California, New York, and Pennsylvania.
Example
An NFL wide receiver residing in Nashville will not owe state tax on home earnings, but will owe California jock tax on income apportioned during games played against California teams.
Cost of Living and Housing
Tennessee’s cost of living is generally lower than many coastal elite markets, though it has risen near major metros:
- Nashville / Franklin: A professional athlete lifestyle can range from $110k–$135k annually, reflecting housing, food, transport, and services.
- Knoxville/Chattanooga: Moderate lifestyles can run $60k+ annually.
Housing
- Typical 3-bed/2-bath homes in the Nashville/Franklin metro are around $350,000, though urban core or luxury neighborhoods command higher valuations.
- Compared with high-tax states, property taxes in Tennessee are generally moderate relative to the absence of an income tax.
Tennessee’s housing market remains relatively affordable when balanced against potential tax savings and athlete income, enhancing net worth building and wealth retention.
Residency Rules
Athletes establishing residency in Tennessee benefit from:
- Zero state income tax on earned and passive income.
- A tax-neutral environment for salary and investment income.
- Residency status that supports long-term wealth accumulation.
Common residency criteria include:
- Tennessee driver’s license or state ID.
- Voter registration in Tennessee.
- Primary domicile documentation.
- Physical presence evidence (utilities, lease/mortgage records).
Example
An athlete with roots in the Southeast may establish Tennessee residency before entering a professional league to maximize net take-home and reduce tax exposure, even when traveling for games.
Why Tennessee is Athlete-Friendly
- No income tax on wages or investment earnings = higher retained income
- Low housing burden relative to major markets
- Sales tax is higher but offset by income tax savings
- Strategic for long-term retirement planning and net worth retention
- Favorable residency environment for high earners
Tennessee’s combination of tax policy and reasonable cost structures makes it attractive for athletes focused on maximizing take-home pay and minimizing leakage to state taxes.
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Related Terms
- Florida State Athlete Taxes
- Texas State Athlete Taxes
- Nevada State Athlete Taxes
- Wyoming State Athlete Taxes
- Washington State Athlete Taxes
Next Reads
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- Why Esports is Turning to Betting Sponsorships
- Five Pro Athletes Poised to Become Billionaires
- Inside the House v. NCAA Settlement and Its Impact on College Sports
Credits
Sources: Tennessee Department of Revenue, State Tax Rates 2025, Zillow / Redfin Housing Data, APSM Proprietary Analysis
Disclaimer: This article contains general financial information for educational purposes and does not constitute professional advice.
Apostle Sports Media 