Tennessee Economy

According to U.S. Bureau of Economic Analysis, in 2005 Tennessee's gross state product was $226.502 billion, making Tennessee the 18th largest economy in the nation. In 2003, the per capita personal income was $28,641, 36th in the nation, and 91% of the national per capita personal income of $31,472. In 2004, the median household income was $38,550, 41st in the nation, and 87% of the national median of $44,472.

Major outputs for the state include textiles, cotton, cattle, and electrical power. There are 90,000 cattle farms in Tennessee all together.[citation needed] Middle Tennessee's importance in terms of cotton production was increased as richer lands became available. Large-scale cultivation of cotton did not begin until the 1820s with the opening of the land between the Tennessee and Mississippi Rivers. The upper wedge of the Mississippi Delta extends into southwestern Tennessee, and it was in this fertile section that cotton took hold.

Major corporations with headquarters in Tennessee include FedEx Corporation, AutoZone Incorporated and International Paper.

The Tennessee income tax does not apply to salaries and wages, but most income from stocks, bonds and notes receivable is taxable. All taxable dividends and interest which exceed the $1,250 single exemption or the $2,500 joint exemption are taxable at the rate of 6%. The state's sales and use tax rate for most items is 7%. Food is taxed at a lower rate of 6%, but candy, dietary supplements and prepared food are taxed at the full 7% rate. Local sales taxes are collected in most jurisdictions, at rates varying from 1.5% to 2.75%, bringing the total sales tax to between 8.5% and 9.75%, one of the highest levels in the nation. Intangible property is assessed on the shares of stock of stockholders of any loan company, investment company, insurance company or for-profit cemetery companies. The assessment ratio is 40% of the value multiplied by the tax rate for the jurisdiction. Tennessee imposes an inheritance tax on decedents' estates that exceed maximum single exemption limits ($1,000,000 for deaths 2006 and after; [4]).

Tennessee is a right to work state, as are most of its Southern neighbors. Unionization has historically been low and continues to decline as in most of the U.S. generally.