Tennessee Individual Income Tax Ranks High Among U.S. States

A Tax Foundation report states that the Tennessee individual income tax ranks high among the states in the U.S. Individual income taxes are important because states tax sole proprietorships, partnerships, limited liability companies, and S corporations.

The Tax Foundation released a report that recently studied the 2023 State Business Climate Index. According to the report, the Tennessee individual income tax ranked sixth in the category and was one of the best for the tax policies in the U.S.

An article in Citizen Tribune states that overall, the state of Tennessee ranked 14th in the Business Climate Index. The ranking of the Tennessee individual income tax apparently helped redeem the state’s 45th rank in corporate taxes and 46th rank in sales taxes. This means that individual income tax is crucial to businesses because states tax sole proprietorships, partnerships, limited liability companies, and S corporations.

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Other States’ Ranks in Individual Income Taxes

According to an article in The Center Square, there are also other U.S. states that received a high rank in the individual income tax category. These states include Wyoming, South Dakota, Florida, and Alaska. Reports say all these states do not have individual income taxes and have no payroll taxes aside from an unemployment insurance tax.

On the contrary, the Tax Foundation report revealed that the states with the lowest rankings include California, Hawaii, New Jersey, and New York. Janelle Fritts of the Tax Foundation states that high marginal rates leave a negative impact on investments and labor outputs which can influence one’s decision in moving to locations.

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