Tennessee stock-comp tax reference
Top marginal rate, supplemental withholding, AMT status, and capital-gains treatment for RSU, ESPP, and ISO income earned by Tennessee residents.
Tax year 2026 · Last updated May 10, 2026
Top marginal income tax rate
No state income tax
Supplemental withholding rate
— (no state tax)
State personal AMT (impacts ISO)
No
LTCG treatment
Special treatment (see notes)
How it works
Note: No state personal income tax. RSU, ESPP, and ISO income are not taxed at the state level for residents — though multi-state allocation may still apply if you worked in another state during the vesting period.
RSU vests
Tennessee does not impose a state income tax on wages, so RSU vests are not taxed at the state level for residents. Multi-state allocation rules may still apply if the vesting period spanned another state.
ESPP qualifying dispositions
No state-level ordinary income or capital-gain tax in Tennessee.
ISO exercises
No state AMT or income-tax impact on ISO exercises in Tennessee.
Frequently asked questions
Does Tennessee have a state income tax on RSU vests?
No. Tennessee has no broad state income tax for residents. Multi-state allocation may still apply if you worked in another state during the vesting period.
What supplemental withholding rate does Tennessee use for RSUs and bonuses?
Tennessee has no state income tax, so no state supplemental withholding applies.
Does Tennessee have a state AMT for ISO exercises?
Tennessee does not impose a personal AMT, so an ISO exercise typically does not trigger a state-level AMT bill (only federal AMT applies).
How does Tennessee tax long-term capital gains?
No state-level capital-gains tax for residents.
Where is this information sourced?
Top marginal rates are from the Tax Foundation 2025 state individual income tax brackets summary. State supplemental rates are from the published guidance of each state's revenue department (linked above). Personal AMT status reflects 2025 legislation. Always confirm current-year rules with the Tennessee Department of Revenue before making decisions.
Is this tax advice?
No. This is a planning reference — state tax law changes frequently and varies by individual situation. Talk to a CPA licensed in Tennessee for advice on a real transaction.