Taxes & Incentives

In addition to having one of the nation’s lowest overall tax burdens, the Nashville region's economic development partners offer exceptional incentives to relocating and expanding businesses. Our economic development team can help your business explore potential incentives that will help your business grow in Middle Tennessee.

For more information or assistance with your site selection process, please contact a member of our economic development team.

Incentives

Incentives for a relocation or expansion project in the Nashville Region come from three sources – State of Tennessee, Tennessee Valley Authority, and the local community. The incentive evaluation process is based on a variety of economic factors including capital investment, new jobs created, wages, etc. A qualified business that creates at least 25 net, new jobs and invests at least $500,000 in a 36 month period may qualify for an incentives package. Based on the project, the incentives could include job tax credits, infrastructure/training assistance, energy credits, low cost loans and grants, tax abatement (PILOT), or others. Qualified businesses are defined as manufacturing, warehousing & distribution, processing tangible property, research & development, computer services, call centers, qualified data center, HQ facilities, convention & trade show facilities, and repair service facilities for aircraft owned by unrelated commercial, foreign, or government persons. 

Download the State of TN/TVA Incentive Fact Sheet.

Please contact a member of our economic development team for more information regarding available incentives.

Taxes

Tennessee has the second lowest state and local tax burden per capita, and no income tax on wages.

Type of TaxRate
Income taxNo income taxes on wages. 6% on certain types of interest income.
Excise tax6.5% on the net earnings of the company derived from doing business in Tennessee
Franchise tax0.25% of the greater of net worth or real and tangible property in Tennessee
Sales taxState: 7% sales tax rate, except food at 5%. Local option: 2.25%-2.75% additional sales tax
Unemployment InsuranceThe first $9,000 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.

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