How is crypto taxed in Tennessee?

Tennessee crypto tax is, for individuals, only federal tax. The state has no tax on earned income and no tax on capital gains, and the Hall tax that once reached some investment income is gone. The federal rules still apply in full, as explained in how crypto is taxed in the US.

Does Tennessee tax crypto gains?

No, not for individuals. Ballotpedia notes that the only state income tax in effect in 2011 was the Hall tax, which did not cover wages or capital gains. In 2014, voters approved Amendment 3 with about 66% support, adding a ban on any state or local tax on payroll or earned personal income to the state constitution, according to Ballotpedia.

That leaves crypto sales untouched at the state level. A Tennessee resident who sells coins at a profit, trades one token for another or earns staking rewards files no Tennessee income tax return for it.

What was the Tennessee Hall tax, and did it apply to crypto?

The Hall income tax applied only to interest from bonds and notes and to dividends from stock, the Department of Revenue says. It did not tax capital gains, so even before repeal it did not reach gains from selling crypto.

The IMPROVE Act of 2017 phased it down. The University of Tennessee's MTAS lists rates of 4% for 2017, 3% for 2018, 2% for 2019 and 1% for 2020. The department says the tax was fully repealed for tax years beginning on or after January 1, 2021, and that no return should be filed for those years.

How does federal crypto tax apply in Tennessee?

The same as everywhere else. The IRS treats digital assets as property. Selling for dollars, swapping, buying goods with crypto and receiving it for work, mining or staking are taxable. Holding and moving coins between your own wallets are not, unless a fee is paid in crypto. Brokers report sales on Form 1099-DA, covered in crypto tax forms.

Businesses are different. Tennessee's 2025 franchise and excise tax return sets the excise tax at 6.5% of taxable income and the franchise tax at 25 cents per $100 of net worth, with a $100 minimum. A crypto business organized as an entity may face these taxes. Entity choice is discussed in can you hold crypto in an LLC.

What are Tennessee's crypto ATM rules?

Tennessee banned them. The Department of Financial Institutions says Public Chapter 766 of 2026 makes it a Class A misdemeanor to knowingly install, place or operate a virtual currency kiosk in the state, for acts on or after July 1, 2026. Other bans are listed in where are crypto ATMs banned.

Rules differ by state and change often. Check the tax authority or a qualified professional for your own situation.