How Tennessee compares
Ranked against the other 49 states on the figures we hold. Rates that combine state and local components — sales tax, the minimum wage where it varies by region — are shown on this page but not ranked, because a single number would misstate them.
| Figure | TN | Nationally | In its region |
|---|---|---|---|
| PopulationUS Census Bureau, Vintage 2025 estimates, July 1, 2025 | 7,315,076 | 15th highest of 50 | 5 of 12 |
| GDP ($bn)Bureau of Economic Analysis, 2025 | 589.8 | 16th highest of 50 | 5 of 12 |
| Median household incomeUS Census Bureau, ACS 2024 1-year, 2024 | $71,997 | 40th highest of 50 | 6 of 12 |
| Unemployment rateBureau of Labor Statistics, LAUS (seasonally adjusted, preliminary), September 2026 | 3.4% | tied 14th lowest of 50 | 3 of 12 |
| Foreign-born shareUS Census Bureau, ACS 2024 1-year, 2024 | 6.5% | 31st highest of 50 | 5 of 12 |
| Property tax ratechecked Nov 2026; confirm with the Tennessee legislature | 0.48% | tied 3rd lowest of 50 | 2 of 12 |
| Deposit return window (days)checked Nov 2026; confirm with the Tennessee legislature | 30 | tied 15th lowest of 50 | 2 of 12 |
| Eviction notice (days)checked Nov 2026; confirm with the Tennessee legislature | 14 | tied 6th highest of 50 | 1 of 12 |
| Final pay deadline (days)checked Nov 2026; confirm with the Tennessee legislature | 0 | tied 1st lowest of the 29 states that set one | 1 of 5 |
- State income tax: no9 of 50 states answer the same way
- At-will employment: yesthe same in all 50 states — it does not set Tennessee apart
- Paid sick leave required: no30 of 50 states answer the same way
- Paid family leave: no38 of 50 states answer the same way
- Workers' comp required: yes49 of 50 states answer the same way
- Rent control permitted: no46 of 50 states answer the same way
- Annual report required: yes43 of 50 states answer the same way
Statistical figures: US Census Bureau, Vintage 2025 estimates (July 1, 2025) · US Census Bureau, ACS 2024 1-year (2024) · Bureau of Economic Analysis (2025) · Bureau of Labor Statistics, LAUS (seasonally adjusted, preliminary) (September 2026) · SBA Office of Advocacy, 2025 Small Business Profiles (2025). Tax, wage, business and tenancy figures are recorded from state sources and were last checked on 2026-11-05 — confirm anything you are about to act on with the Tennessee legislature.
What's changing in Tennessee
Enacted changes with a fixed effective date. Contracts, payroll and leases signed now may run past these dates.
Took effect in the last 12 months
- July 1, 2026Non-competes unenforceable for workers earning under $70,000
HB 1034; applies to agreements from July 1, 2026.
Source ↗
Checked against official sources on 2026-11-05.
How long you have in Tennessee
The periods that decide whether something is on time. Days are calendar days unless the underlying rule says otherwise.
- Return a security deposit within
- 30 days
- Eviction notice before filing
- 14 days
- Final paycheck within
- 0 days
- LLC formation processed in
- 3—5 business days (online)
- Annual report due
- By the first day of the 4th month following the fiscal year end
- Overtime starts after
- 40 hours/week (FLSA)
AI Legal Insights — Tennessee
AI-generated · Updated July 2026
Tennessee operates under a dual court system consisting of general jurisdiction trial courts and specialized chancery courts for equity matters. The state is known for its robust adherence to common law principles and specific statutes governing landlord-tenant relations and consumer protection.
Tennessee offers a highly competitive business environment characterized by no state income tax and a growing concentration of healthcare, logistics, and manufacturing industries. While the regulatory environment is generally business-friendly, entrepreneurs must navigate a relatively high average sales tax and specific local business license requirements.
The immigrant population in Tennessee is relatively small at 5.5%, with significant concentrations in urban centers like Nashville and Memphis. The state does not have sanctuary city policies, and immigration-related enforcement is primarily managed through federal<pad><pad> agencies and state-level legislative frameworks.
- ›Ensure all contracts involving real estate<pad><pad> include specific compliance with Tennessee's strict Statute of Frauds requirements.
- ›Include a clear choice-of-law clause specifying Tennessee to avoid<pad><pad><pad><pad><pad><pad><pad><pad><pad><pad><pad> de facto application of foreign jurisdictions in disputes.
- ›Be mindful of Tennessee's specific<pad> OKC statutes regarding non-compete agreements, which are enforceable only if they are reasonable in time, scope, and geography.
AI-generated insights · Verify with a licensed attorney before relying on this information.
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Employment Laws
Tennessee labor regulations
Tennessee is an at-will employment state with no state minimum wage law, so the federal minimum of $7.25/hr applies. The state does not require paid sick leave or paid family leave. Workers' compensation insurance is mandatory for employers with 5 or more employees (1 or more in construction). Since July 1, 2026, non-compete agreements are unenforceable against workers earning under $70,000.
| Law | TN Rule | Federal Floor |
|---|---|---|
| Minimum Wage | $7.25/hr (federal rate; no state minimum wage law) | $7.25/hr |
| Overtime | After 40 hrs/week (follows FLSA) | FLSA: after 40 hrs/week |
| Paid Sick Leave | None required by state law | None (federal) |
| Paid Family Leave | None required by state law | FMLA: 12 weeks unpaid |
| Workers Comp | Required for employers with 5+ employees (1+ in construction) | Federal employees: yes |
| At-Will Employment | Yes — either party may end employment at any time for any lawful reason | Default nationwide |
| Final Paycheck | By the next regular payday or within 21 days of separation, whichever is later | Next regular payday |
| Meal Breaks | 30-min unpaid break for employees scheduled to work 6 consecutive hours (with limited exceptions); stricter rules for minors | No federal requirement |
| Non-Compete Agreements | Unenforceable for workers earning under $70,000 (agreements from July 1, 2026); otherwise must be reasonable in time, territory, and scope | No general federal ban |
- Non-competes signed on or after July 1, 2026 cannot be enforced against workers earning under $70,000 a year; agreements with higher earners must still be reasonable in duration, geography, and scope.
- The Tennessee Human Rights Act prohibits employment discrimination based on race, creed, color, religion, sex, age, and national origin; a separate state law covers disability discrimination.
- Tennessee requires employers to hire only workers authorized to work in the U.S., and larger employers must verify new hires through E-Verify.
- State law gives limited protection to employees fired for refusing to take part in, or refusing to stay silent about, illegal activities.
- Employers may join the state's voluntary drug-free workplace program, which sets testing procedures and gives participating employers a discount on workers' compensation premiums.
- Child labor laws restrict the hours and types of work for minors under 18.
- Cities and counties may not set their own minimum wage above the state (federal) level.
Sources: U.S. Department of Labor state minimum wage table · state labor agencies (checked Nov 2026)
Landlord-Tenant Laws
Tennessee rental regulations
Most Tennessee renters are covered by the Uniform Residential Landlord and Tenant Act (URLTA), which applies in the state's larger counties, including Davidson, Shelby, Knox, and Hamilton. Smaller counties follow other state statutes and common law. There is no statutory limit on security deposits, and local rent control is prohibited statewide. Under URLTA, eviction for non-payment starts with a 14-day written notice.
| Topic | TN Rule |
|---|---|
| Security Deposit | No statutory limit; in URLTA counties the deposit must be kept in a separate bank account and the tenant told where it is held |
| Deposit Return | Within 30 days of the end of the tenancy, with an itemized written list of any deductions |
| Rent Control | Prohibited statewide — cities and counties may not enact rent control |
| Eviction Notice (Non-Payment) | 14-day written notice to pay or vacate in URLTA counties |
| Late Fees | Must be stated in the lease; state law limits the amount and requires a short grace period in URLTA counties |
| Landlord Entry | Entry at reasonable times with the tenant's consent, which the tenant may not unreasonably withhold; immediate entry allowed in emergencies |
| Habitability | In URLTA counties the landlord must make repairs needed to keep the premises fit and habitable and comply with building codes |
| Retaliation Protection | URLTA prohibits retaliatory eviction, rent increases, or service cuts after a tenant's good-faith complaint to the landlord or a government agency |
| Self-Help Eviction | Landlord may not lock out a tenant or remove belongings without a court order |
Both landlords and tenants have enforceable rights under Tennessee law. Document all communications and keep copies of your lease agreement. Use AI review to spot risky clauses before signing.
Starting a Business
Tennessee LLC formation guide
Tennessee has no personal income tax (the Hall tax on investment income was fully repealed in 2021), a low 0.48% average property tax rate, and a central location for logistics. Businesses pay a 6.5% excise (corporate income) tax plus a franchise tax, and the combined sales tax averages about 9.61%. An LLC costs at least $300 to form, and the annual report also carries a $300 minimum fee. The state has about 741,000 small businesses, employing 41.5% of the private workforce.
Step-by-step LLC formation
- 1Choose a business name — must include "LLC", "L.L.C.", or "Limited Liability Company"; verify availability at sos.tn.gov
- 2Designate a registered agent — must have a physical Tennessee address and be available during business hours
- 3File Articles of Organization with the Tennessee Secretary of State online at sos.tn.gov; the fee is based on the number of members, with a $300 minimum
- 4Get an EIN from the IRS — free at irs.gov
- 5Register with the Tennessee Department of Revenue at tntap.tn.gov (Tennessee Taxpayer Access Point) for franchise and excise tax, sales and use tax, and business tax as applicable
- 6Obtain a business license from your county clerk (and city, if required) if your business meets the gross receipts threshold
- 7File an Annual Report with the Tennessee Secretary of State by the first day of the 4th month after your fiscal year ends; the fee is based on the number of members, with a $300 minimum
- 8If employing workers, register with the Department of Labor and Workforce Development for unemployment insurance
- 9Open a business bank account using your EIN and Articles of Organization
- 10Check local requirements — Nashville, Memphis, Knoxville, and Chattanooga may have additional permits
Every LLC also needs a free EIN from the IRS (Form SS-4). Apply online at irs.gov — takes about 15 minutes and is required to open a business bank account.
Popular IRS Forms
Most-filed federal forms for Tennessee taxpayers
Fill these out online with plain-English guidance — every field explained, no accountant required. Download as a ready-to-file PDF when done.
The main annual federal income tax return every taxpayer files.
Fill out free →Give your SSN or EIN to a client before getting paid as a contractor.
Fill out free →Report $600+ paid to independent contractors during the year.
Fill out free →Tell your employer how much federal tax to withhold from pay.
Fill out free →Report income and expenses from a sole proprietorship or LLC.
Fill out free →Report payroll taxes withheld from employees each quarter.
Fill out free →Get an automatic 6-month extension to file your 1040.
Fill out free →The year-end wage statement employers issue to each employee.
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Federal Offices
United States government offices in Tennessee
Walk-in assistance by appointment only. Call (844) 545-5640 to schedule, or book online at irs.gov.
Free Legal Aid
Tennessee legal assistance organizations
These organizations provide free or reduced-cost civil legal services to qualifying Tennessee residents.
Free civil legal services for low-income residents of Middle Tennessee
Free civil legal help for low-income residents in the Memphis metro area
Free civil legal services across 32 counties in East Tennessee
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