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★ Tennessee State Guide

Side Hustles in Tennessee

Zero state income tax on earned income. State law explicitly protects gig workers as independent contractors. Nashville's 16 million annual visitors and Memphis's FedEx logistics hub create exceptional earnings opportunities.

See Tax Breakdown Top Platforms
$0
State Income Tax
91
COL Index (US avg 100)
560K
Active Gig Workers
16M+
Nashville Annual Visitors
Tax Guide

Tennessee's Gig Worker Tax Situation

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No State Income Tax - Hall Tax Repealed 2021

Tennessee fully repealed the Hall Tax on investment income effective January 1, 2021. Tennessee now has zero income tax of any kind. Gig workers pay only federal taxes - no TN state return, no TN quarterly payments.

Hall Tax History - Why This Matters

Tennessee's Hall Tax was a 6% tax on dividends and interest income only - it never applied to wages or self-employment income. Even before the 2021 repeal, gig workers in Tennessee owed zero state income tax on their earned gig income. The repeal simply made this complete: no state income tax of any kind now exists in Tennessee.

Tennessee vs Neighboring States (at $50K Net Gig Income)

State State Tax Rate Approx. Annual State Tax
Tennessee 0% $0
North Carolina (neighbor) 4.5% flat ~$2,250
Virginia (neighbor) 2-5.75% ~$2,500
Kentucky (neighbor) 4.0% flat ~$2,000
Georgia (neighbor) 5.49% flat ~$2,745

Amounts approximate. Assumes $50,000 net self-employment income.

Tennessee Has 9.55% Sales Tax - Highest in US

Tennessee funds its government through sales tax, not income tax. The combined state (7%) and average local sales tax (2.55%) totals 9.55% - highest average rate in the US. This affects gig workers who buy supplies, equipment, or vehicles used for their gig work. Business vehicle depreciation deductions at the federal level help offset this, but budget for it on purchases.

Regulations

Tennessee Gig Worker Laws

TCA 50-7-207 - Tennessee's Explicit IC Protection Law

Tennessee Code Annotated 50-7-207 explicitly classifies marketplace platform workers as independent contractors. The law states that a marketplace platform worker is an independent contractor - not an employee - if: (1) the platform does not prescribe specific hours of work, (2) the platform does not require exclusivity or prevent work for competing platforms, and (3) the platform does not prevent the worker from maintaining their own customer relationships. This is one of the most contractor-favorable state laws in the US. Unlike California's ABC test, TCA 50-7-207 starts with an IC presumption rather than an employee presumption.

Advantages for TN Gig Workers

  • ✓ No state income tax - zero TN return required for earned income
  • ✓ TCA 50-7-207 explicitly protects marketplace IC status at state level
  • ✓ COL index 91 - 9% below national average
  • ✓ Nashville tourism economy creates exceptional rideshare demand
  • ✓ Memphis FedEx hub drives last-mile delivery gig availability
  • ✓ 5 major metro markets - Nashville, Memphis, Knoxville, Chattanooga, Murfreesboro
  • ✓ No local income tax in any TN municipality (Nashville, Memphis, etc.)

Challenges to Plan For

  • × 9.55% combined sales tax is highest average in the US - affects supply costs
  • × $7.25 federal minimum wage only - no state minimum wage increment
  • × Nashville traffic congestion adds to delivery times and fuel costs
  • × Must purchase own health insurance - use HealthCare.gov or TN marketplace
  • × 15.3% federal SE tax applies (unavoidable in all states)
  • × Nashville housing costs rising fast, eroding COL advantage in-city
Platforms

Top Gig Platforms in Tennessee

Uber / Uber Eats
$22-40+/hr Nashville surges
Rideshare Food Delivery

Uber is the dominant rideshare platform in Nashville, where Broadway's honky-tonk district generates near-continuous surge pricing on weekend nights. CMA Fest, Predators/Titans games, and conventions multiply demand. Active in all 5 TN major cities.

DoorDash
$16-24/hr in Nashville/Memphis
Food Delivery Top Platform

Tennessee's top food delivery platform by volume. Nashville's dense restaurant corridor (12South, East Nashville, downtown) generates strong order flow. Memphis's urban core and Midtown neighborhood also produce consistent DoorDash demand.

Amazon Flex
$18-25/hr delivery blocks
Package Delivery Set Shifts

Amazon has major fulfilment centers near Nashville and Memphis. Memphis's logistics infrastructure - anchored by FedEx - makes it one of the best Flex markets in the south. Blocks available year-round, with maximum availability in Q4 holiday season.

Lyft
$18-35/hr Nashville events
Rideshare Event Surge

Lyft competes strongly with Uber in Nashville. Bachelorette parties - Nashville is called the "Bachelorette Capital of the US" - generate tens of thousands of rideshare trips monthly. Dual-apping Uber + Lyft simultaneously is standard practice for TN drivers.

Instacart
$18-26/hr with batch orders
Grocery Delivery Flexible

Active across all major TN markets. Hy-Vee (Memphis), Kroger, Publix, Costco, and Whole Foods partnerships generate consistent orders. Grocery delivery demand grew sharply post-pandemic and remains elevated. Suburban Nashville (Franklin, Brentwood) are high-value Instacart zones.

TaskRabbit / Handy
$35-80/hr skilled tasks
Home Services High Earning

Nashville's housing boom and growing population of new transplants drives strong TaskRabbit demand for furniture assembly, TV mounting, and handyman tasks. Knoxville and Chattanooga are emerging markets for home services gig work.

More platforms active in Tennessee
Grubhub Shipt Spark Driver (Walmart) Rover (pet sitting) Wag (dog walking) Turo (car rental) Airbnb (Nashville STR) Upwork (remote) Fiverr (remote) Gopuff

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Cost of Living

Tennessee Cost of Living Index

Tennessee's overall COL index of 91 means living costs run about 9% below the national average - but this varies significantly by city. Nashville (COL ~110) is now above average due to housing inflation. Memphis (COL ~83), Knoxville (~88), and Chattanooga (~89) offer genuinely low costs. For gig workers, operating outside Nashville's urban core while serving it for work can be the optimal strategy.

Housing (statewide avg)86 vs 100 avg
Groceries96 vs 100 avg
Transportation90 vs 100 avg
Healthcare91 vs 100 avg
Utilities89 vs 100 avg
Tax Savings + Below-Average COL = Strong Real Income

A gig worker earning $50,000 net in Tennessee saves roughly $2,000-3,000 per year vs. working in neighboring North Carolina or Georgia (state income tax) and another $3,000-5,000 per year in lower living expenses vs. national average. The compound effect is $5,000-8,000+ in effective additional annual income compared to many comparable southern states.

91
Overall COL Index
0%
State Income Tax
560K
Active Gig Workers
Markets

Gig Markets Across Tennessee

Nashville
Population: 683,000 (metro 2.1M)
Very High Demand

Tennessee's capital and top gig market. Broadway's honky-tonk strip and Lower Broadway generate exceptional rideshare surge pricing nightly. 16+ million annual visitors fuel continuous demand. Music City Center conventions, Bridgestone Arena events, Titans and Predators games, and the city's exploding bachelorette party economy make it one of the best rideshare markets in the entire Southeast US.

Memphis
Population: 633,000 (metro 1.3M)
Very High Demand

Home of FedEx's global World Hub, which processes 3+ million packages daily and employs 30,000+ locally. This logistics infrastructure makes Memphis a top Amazon Flex and delivery gig market. Beale Street entertainment district drives rideshare demand. Memphis's COL index (~83) is among the lowest of any large US metro, meaning gig earnings stretch significantly further here than in Nashville.

Knoxville
Population: 192,000 (metro 870K)
High Demand

Home of the University of Tennessee with 30,000+ students concentrated in the Fort Sanders neighborhood - creating a dense food delivery zone that generates disproportionately high order volume for a mid-size city. Tennessee Volunteers football (Neyland Stadium seats 102,000) creates massive rideshare demand on game days. Downtown Market Square also drives consistent delivery and rideshare volume.

Chattanooga
Population: 181,000 (metro 570K)
Moderate Demand

Called "Gig City" due to its early municipal gigabit fiber rollout, Chattanooga has a growing tech and startup scene. Volkswagen's US manufacturing plant is a major employer. The city's revitalized waterfront and outdoor recreation (rock climbing, hiking) attract tourism. DoorDash, Uber, and Instacart are all active. Smaller overall volume than Nashville or Memphis but with lower driver competition.

Murfreesboro
Population: 152,000
Moderate - Growing

One of the fastest-growing cities in Tennessee, driven by Nashville suburban expansion. Middle Tennessee State University (22,000 students) creates campus food delivery demand. Murfreesboro and adjacent Smyrna (Nissan manufacturing) and La Vergne form a growing suburban gig zone. Drivers based here can access both Murfreesboro orders and Nashville market within 30 miles.

Resources

Tennessee Gig Worker Resources

Tennessee Department of Revenue
tntaxes.com / tn.gov/revenue

Confirm Tennessee's zero income tax status and understand TN's 7% state sales tax (plus local additions up to 2.75%). Also covers franchise and excise tax if you form an LLC or corporation for your gig business.

TN Department of Labor and Workforce Development
tn.gov/workforce

Information on TCA 50-7-207 independent contractor protections, worker classification standards, and workplace rights. Handles misclassification complaints if a platform incorrectly treats you as an employee and withholds IC benefits.

IRS Self-Employed Center
irs.gov/businesses/small-businesses-self-employed

Because TN has no state income tax, the IRS is your primary tax authority. Covers quarterly estimated payments (Form 1040-ES), Schedule C net profit calculation, SE tax (15.3%), and the standard mileage deduction ($0.67/mile for 2024).

Tennessee Small Business Development Center
tsbdc.org

Free consulting for gig workers and self-employed individuals on LLC formation, bookkeeping, quarterly tax planning, and scaling from gig work to a full business. Offices in Nashville, Memphis, Knoxville, Chattanooga, and other cities statewide.

FAQ

Tennessee Gig Worker FAQ

No. Tennessee has no state income tax on wages or gig earnings. The Hall Tax on investment income (dividends and interest) was fully repealed effective January 1, 2021. Gig workers pay only federal income tax and self-employment tax (15.3% on net earnings, with 50% deductible). No TN state return is required for earned income, and there are no state quarterly estimated payments. Tennessee is one of nine zero-income-tax states in the US.
Tennessee Code Annotated 50-7-207 explicitly classifies marketplace platform workers as independent contractors - not employees - if the platform does not prescribe specific work hours, does not require exclusivity, and does not prevent workers from using competing platforms. This is a state law that provides gig workers with clear IC status, protecting against reclassification. Unlike California's AB5, which starts with an employee presumption, TCA 50-7-207 starts with an IC presumption - one of the most contractor-favorable stances in the US.
Nashville receives over 16 million visitors annually. Broadway's honky-tonk strip, the Grand Ole Opry, CMA Fest, and Bridgestone Arena events generate near-continuous rideshare surge pricing on weekend nights. Nashville is also considered the "Bachelorette Capital of the US," generating tens of thousands of rideshare trips monthly from party groups. Drivers on Nashville's Broadway corridor regularly report $35-45+/hr during peak hours - among the highest consistent rideshare earnings of any mid-size US city.
Memphis is the global headquarters of FedEx, which operates the world's largest cargo airline hub at Memphis International Airport, processing 3+ million packages daily. This creates a massive logistics ecosystem. Amazon Flex delivery blocks in Memphis are among the most available in Tennessee. DoorDash and Uber Eats are strong due to Memphis's population of 633,000. Memphis's COL index (~83) is one of the lowest of any large US city, meaning gig earnings go significantly further compared to national averages.
Tennessee gig workers owe federal self-employment tax (15.3% on net self-employment earnings up to the Social Security wage base; 2.9% above that) and federal income tax on adjusted gross income. Deduct 50% of your SE tax from AGI, then subtract home office deductions, vehicle mileage ($0.67/mile for 2024), phone and equipment expenses, and other business costs. Pay quarterly federal estimated taxes (Form 1040-ES) four times per year. There is no TN state income tax, no TN quarterly estimated payment, no TN state self-employment surcharge, and no local income tax in Nashville, Memphis, or any other TN municipality.

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