NASHVILLE, Tenn. (WKRN) — Tennessee is one several states without a state income tax on earned income. However, a recent study reveals that top earners in the state still pay millions in taxes.
SmartAsset, a personal finance website, analyzed the most recent data from the IRS for personal income tax returns in 2021 to rank states by the total income tax paid by the top 1%.
The top earners in the Volunteer State have the 17th highest tax payments in the nation, according to the study.
In fact, SmartAsset reports that Tennessee's top 1% paid $16,260,168 in income taxes, falling behind California, New York and Florida, which all ranked among the top three.
Eight states, including Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming, do not levy a state income tax. However, the Tax Foundation reports that Tennessee and Washington have some of the highest sales tax rates in the country.
In addition, the data revealed that the share of total income tax paid by Tennessee's top 1% in 2021 totaled to 45.5%.
According to SmartAsset, the average tax rate on the top earners in Tennessee was 25.4%. In comparison, Connecticut has the highest effective tax rate on top earners, paying 27.69% on each dollar of income.
Nationwide, the top 1% of earners pay a 25.95% effective tax rate, according to the study, which "yielded a total of $993.7 billion dollars in income taxes paid by the top 1% over one year, or 45% of all individual income tax collected."
To view how much the top 1% of earners in each state pay in taxes, click here.