Updated: August 10, 2026

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A Tennessee resident with a self-directed gold IRA plans against a single tax schedule: the federal one. Tennessee never taxed wages, and the last piece of the state’s income-tax code (the Hall tax on interest and dividends) was fully repealed on January 1, 2021. That leaves the federal rules under IRC Sections 72, 219, 408, and 408A as the only rules that touch a Tennessee IRA balance through contribution, conversion, and distribution.

This page walks through the four state-level dimensions that shape a Tennessee gold IRA account across a full lifecycle. The dimensions are the no-income-tax baseline, the Hall Income Tax repeal history, the sales-tax treatment of physical bullion under Tennessee Code Annotated Title 67 Chapter 6, and the absence of any state estate or inheritance tax on an inherited IRA. Each dimension is anchored to a Tennessee statute or a Tennessee Department of Revenue publication.

The federal-side questions on IRC Section 72(t) early-withdrawal exceptions, SECURE 2.0 required minimum distribution ages, and IRC Section 3405 withholding still apply in Tennessee exactly as they apply in every other state. The Tennessee-specific value is the absence of a second tax layer on top of the federal number reported on Form 1099-R.

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Tennessee has no state income tax on wages, pensions, or IRA distributions

Tennessee is one of nine states with no broad individual income tax. The others are Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Washington, and Wyoming. The Tennessee Constitution at Article II Section 28 authorizes taxation of property and privileges but was interpreted for decades to bar a general wage tax. The result is a state where earned income has never flowed through a state Form 1040 equivalent.

Retirement income sits inside the same rule. A traditional IRA distribution from a self-directed gold IRA held by an IRC Section 408(a) custodian is reported on federal Form 1099-R. The federally taxable amount flows into federal AGI. The same distribution generates zero Tennessee state income tax for a Tennessee resident because there is no state income tax schedule to apply against it.

A Roth IRA qualified distribution (five-year period met and the participant age 59 and a half or older, or another qualifying event) is federally tax-free and Tennessee tax-free. A non-qualified Roth distribution triggers federal tax on the earnings portion only under the ordering rules in IRC Section 408A(d). The Tennessee state-level portion is still zero.

Social Security benefits, private-sector pensions, 401(k) distributions, 403(b) distributions, 457(b) distributions, and Tennessee Consolidated Retirement System (TCRS) benefits all fall inside the same zero-state-tax result. The Tennessee Department of Revenue administers business taxes and consumption taxes, not an individual income tax.

The Hall Income Tax and its full repeal effective January 1, 2021

Bar chart of the Tennessee Hall Income Tax rate declining from 6 percent in 2015 to zero in 2021, following the Public Chapter 1085 phase-down schedule. — Source: Tennessee Public Chapter 1085 of 2016, Hall Income Tax phase-down schedule (T.C.A. Title 67 Chapter 2, repealed).

Tennessee historically imposed the Hall Income Tax, a state levy on interest and dividend income received by individuals, partnerships, and certain fiduciaries. The Hall tax was codified in Tennessee Code Annotated Title 67 Chapter 2. The tax never reached wages, pensions, IRA distributions, or capital gains. The rate stood at 6 percent for many years before the phase-down began.

Public Chapter 1085 of the 2016 legislative session set the phase-down schedule. The rate dropped by one percentage point in each subsequent tax year: 5 percent for 2016, 4 percent for 2017, 3 percent for 2018, 2 percent for 2019, and 1 percent for 2020. The rate reached zero for tax years beginning on or after January 1, 2021, and the Hall tax was fully repealed on that date.

The repeal was administratively closed by the Tennessee Department of Revenue, which retired the Form INC 250 filing requirement for tax years after 2020. A Tennessee resident no longer files any state individual income tax return. The federal Form 1040 is the only return that reports investment income for a Tennessee individual filer.

The Hall repeal is technically irrelevant to IRA mechanics because IRA distributions were never within the scope of the Hall tax. The Hall tax reached interest and dividend income in taxable brokerage accounts, not inside-the-wrapper income earned by an IRA. The historical significance for a Tennessee retiree is the removal of the last layer of state-level income taxation on any income category.

Roth conversions from a Tennessee traditional IRA are a federal-only event

A Roth conversion moves pre-tax dollars from a traditional IRA into a Roth IRA. The converted amount is federally taxable as ordinary income in the conversion year under IRC Section 408A(d)(3). The federal marginal-bracket cost is the only cost. Tennessee adds nothing to the number because Tennessee has no state income tax.

The planning implication is direct. A Tennessee resident evaluating a multi-year Roth conversion ladder sizes each annual conversion against the federal single or married-filing-jointly bracket schedule alone. There is no companion state calculation. A California resident sizing the same ladder would layer the California R&TC Section 17041 rate on top of the federal number. A Tennessee resident does not.

A Tennessee resident with a self-directed gold IRA holding IRS-approved metals under IRC Section 408(m) can convert the metals sleeve to a Roth IRA in kind. The fair market value of the metal on the conversion date is the federally taxable amount, reported on Form 1099-R. The state-level dimension in Tennessee remains zero.

For a single Tennessee teacher or a Tennessee public safety officer coordinating a TCRS pension with a supplemental 403(b) balance, the conversion sequence is covered in more depth on the OPRS Tennessee TCRS pension and gold IRA page. That page walks through the Legacy versus Hybrid plan mechanics and the 403(b) trustee-to-trustee transfer sequence.

Sales-tax treatment of investment coins and bullion under T.C.A. 67-6-364

Tennessee exempts sales of investment coins, currency, and precious-metal bullion from the state and local sales and use tax. The exemption is codified at Tennessee Code Annotated Section 67-6-364, enacted by Public Chapter 803 of 2022 and effective for sales on and after May 27, 2022. The exemption covers coins, currency, and bullion sold at a price above the face or nominal value.

Before the 2022 enactment, Tennessee applied its 7 percent state sales tax and any local option rate (up to 2.75 percent additional) to bullion purchases. A retiree buying $100,000 of IRS-approved American Gold Eagle coins outside an IRA wrapper would have paid roughly $7,000 to $9,750 in combined state and local sales tax under the pre-2022 rule. The 2022 exemption cut that to zero.

The sales-tax exemption applies to bullion purchases made outside an IRA wrapper. An IRA purchase of IRS-approved metal is a rollover or contribution inside a tax-deferred structure. The IRA custodian, not the retiree, is the buyer of record, and the metal is delivered directly to an IRS-approved depository.

The exemption does matter for personal (non-IRA) coin and bullion purchases. It also matters for any in-kind distribution taken from the IRA and later re-sold to a Tennessee dealer by the participant.

A retiree taking an in-kind distribution of IRS-approved bullion from a self-directed gold IRA under IRC Section 408(m) receives the metal shipped from the depository. A later personal sale of that metal to a Tennessee dealer or auction is a capital-gains event at the federal level (the 28 percent collectibles rate under IRC Section 1(h)(4) applies). The buyer’s Tennessee sales tax obligation is zero because the T.C.A. 67-6-364 exemption applies.

Tennessee has no state estate tax and no inheritance tax on inherited IRAs

Tennessee imposes no state estate tax and no inheritance tax as of tax year 2026. The Tennessee inheritance tax was fully repealed for decedents dying on or after January 1, 2016 by Public Chapter 1057 of 2012. Before repeal, the tax had reached estates above the state exclusion amount, which the phase-out raised each year until repeal.

The federal estate tax under IRC Section 2001 still applies. The 2025 federal exclusion amount was $13.99 million per individual and $27.98 million for a married couple electing portability. The 2026 amount is set by IRS Revenue Procedure for the 2026 tax year. The Tax Cuts and Jobs Act doubling of the exclusion sunsets on January 1, 2026, absent congressional action, and the post-sunset exclusion is projected at approximately $7 million per individual after inflation adjustment.

An inherited IRA held by a Tennessee-resident beneficiary follows the federal rules only. A non-spouse beneficiary is subject to the 10-year distribution rule under IRC Section 401(a)(9)(H), as amended by the SECURE Act of 2019. Each distribution is federally taxable as ordinary income to the beneficiary. The Tennessee state-tax cost is zero.

The 2022 IRS proposed regulations added annual required minimum distributions inside the 10-year window when the decedent had already begun RMDs. That change layers on top of the federal treatment. Tennessee still adds nothing at the state level.

A surviving spouse beneficiary may treat an inherited IRA as the spouse’s own IRA under IRC Section 408(d)(3)(C) or continue as a beneficiary. The Tennessee state-tax result is the same in either treatment: zero. The federal treatment differs on the RMD calculation and the availability of Roth conversion options.

Federal mechanics still apply: 72(t), RMDs, and withholding

Tennessee’s zero-state-tax status does not remove the federal layer. The IRC Section 72(t) 10 percent additional tax on pre-59-and-a-half distributions applies in full. The federal exceptions (medical expenses above 7.5 percent of AGI, qualified higher education expenses, first-time homebuyer up to $10,000, substantially equal periodic payments, and the public safety officer age-50 exception under Section 72(t)(10)) apply on the federal return.

The SECURE Act 2.0 amended IRC Section 401(a)(9). The required minimum distribution age is 73 for participants born between 1951 and 1959 and 75 for participants born in 1960 or later. The RMD calculation uses the Uniform Lifetime Table in IRS Publication 590-B Appendix B. A Tennessee resident has no parallel state-level RMD because there is no state income tax to trigger against.

The federal withholding default on a traditional IRA distribution is 10 percent under IRC Section 3405(b)(1), unless the participant elects out on IRS Form W-4R. A Tennessee resident’s Form 1099-R will show blank or zero in Box 14 (state tax withheld) and Box 15 (state ID) because Tennessee is not a withholding state on retirement distributions. The recipient still owes the federal amount at the marginal rate at the time of the return.

An indirect 60-day rollover under IRC Section 408(d)(3) from an employer plan carries a mandatory 20 percent federal withholding at the plan level before the participant receives the check. A direct trustee-to-trustee transfer avoids the withholding. The Tennessee state-level dimension is moot either way. The federal detail is covered in IRS Publication 590-A for contributions and rollovers and in IRS Publication 590-B for distributions.

Common mistakes Tennessee retirees make on a gold IRA

Assuming the Hall repeal changed IRA distribution treatment. The Hall tax never reached IRA distributions. The repeal effective January 1, 2021 is meaningful for taxable brokerage-account interest and dividends. It is a no-op for a self-directed gold IRA distribution, which was always state-tax-free in Tennessee under the pre-2021 rules as well.
Filing an inherited IRA distribution on a Tennessee return that no longer exists. Tennessee does not require an individual income tax return for tax years after 2020. A Tennessee-resident beneficiary of an inherited IRA reports the distribution on federal Form 1040 only. There is no companion Tennessee filing.
Overlooking the 28 percent federal collectibles capital gains rate on a post-distribution personal sale. Tennessee has no state sales tax on the coin or bullion resale under T.C.A. 67-6-364, and no state income tax on the capital gain. The 28 percent federal collectibles rate under IRC Section 1(h)(4) still applies to the gain on physical bullion held personally outside an IRA.
Missing the SECURE 2.0 RMD age update. A participant born in 1953 is under the age-73 rule. A participant born in 1961 is under the age-75 rule. The custodian’s automated RMD calculation should reflect the birth-year cohort. A missed RMD triggers the federal excise tax (reduced by SECURE 2.0 to 25 percent, or 10 percent if corrected within the two-year correction window), and Tennessee still adds nothing.
Confusing property tax with a state income tax. Tennessee counties and municipalities levy property tax under T.C.A. Title 67 Chapter 5. The state-level property tax rate is zero. Local property tax is not an income tax. A Tennessee retiree with a large gold IRA balance still pays property tax on the primary residence based on assessed value at the county rate.
Skipping the sales-tax exemption on non-IRA bullion purchases. A Tennessee retiree buying investment coins or bullion outside the IRA wrapper is exempt from the 7 percent state sales tax and any local option rate under T.C.A. 67-6-364. The exemption is claimed at the point of sale. A retiree who accepts a sales-tax charge on an investment-grade bullion invoice inside Tennessee should challenge the invoice against the statute.

Does Tennessee tax IRA distributions at any level?

No. Tennessee has no individual income tax on wages, pensions, Social Security, capital gains, or IRA distributions. The Hall Income Tax on interest and dividends was fully repealed for tax years beginning on or after January 1, 2021 under Public Chapter 1085 of 2016. The Tennessee Department of Revenue no longer administers an individual income tax filing requirement.

Tennessee counties and municipalities impose property tax under T.C.A. Title 67 Chapter 5, and the state and local sales tax rate reaches most tangible personal property purchases at the retail level. Neither tax reaches a gold IRA distribution. The distribution is a federal-only taxable event for a Tennessee-resident participant.

Is a Roth conversion from a Tennessee traditional IRA taxable in Tennessee?

No at the state level, yes at the federal level. A Roth conversion is federally taxable as ordinary income in the conversion year at the federal marginal rate under IRC Section 408A(d)(3). The Tennessee state-tax cost is zero because there is no Tennessee individual income tax.

A multi-year Roth conversion ladder for a Tennessee resident is sized against the federal bracket schedule only. There is no companion state calculation and no companion state filing. The custodian issues a federal Form 1099-R for the conversion amount, and the participant reports the conversion on federal Form 8606.

Does Tennessee charge sales tax on gold or silver bullion?

No, for investment coins, currency, and precious-metal bullion sold at a price above face or nominal value. The exemption is codified at Tennessee Code Annotated Section 67-6-364, enacted by Public Chapter 803 of 2022 and effective on and after May 27, 2022. The exemption covers investment-grade gold, silver, platinum, and palladium coins and bullion.

Numismatic collectibles sold primarily for their collector value (a rare early American coin, for example) can raise interpretation questions on the “investment” characterization. Investment-grade IRS-approved metals for a gold IRA (American Gold Eagle, American Gold Buffalo, IRA-eligible bars from a COMEX or LBMA-approved refiner) fall inside the exemption on any reasonable reading.

Does Tennessee have a state estate tax or inheritance tax?

No. Tennessee has no state estate tax and no inheritance tax as of tax year 2026. The Tennessee inheritance tax was fully repealed for decedents dying on or after January 1, 2016 by Public Chapter 1057 of 2012. Tennessee never enacted a standalone estate tax after the federal pickup credit was zeroed by EGTRRA 2001.

The federal estate tax under IRC Section 2001 still applies to a Tennessee-resident decedent whose gross estate exceeds the applicable exclusion amount. The post-sunset 2026 exclusion is projected at approximately $7 million per individual after inflation adjustment. A Tennessee-resident gold IRA holder with a balance above that threshold should coordinate beneficiary designations with an estate-planning attorney.

Tennessee Gold IRA: State Tax Rules and 2026 Considerations