Tennessee is home to more than 480,000 veterans — the fourth-largest veteran population in the South — and offers some of the most financially powerful state benefits in the country. With no broad state income tax, a complete property tax exemption at 100% P&T, free hunting and fishing, three state veterans homes, and robust education programs, Tennessee rewards military service in ways that directly impact your bottom line.
When military retirees and disabled veterans choose where to settle, state-level financial benefits rank among the top decision factors — and Tennessee consistently ranks as one of the best states in the nation for veteran retirees. Here's the financial picture in a single paragraph: Tennessee has no state income tax on any income (wages, retirement pay, VA disability, Social Security), a complete property tax exemption for 100% P&T veterans, a free hunting and fishing license for 100% disabled veterans, robust education programs including free community college through Tennessee Reconnect, and three state veterans homes providing long-term care.
The combination of no income tax and full property tax exemption is particularly powerful. A veteran in Tennessee with $3,938.58/month in TDIU compensation and a $300,000 home saves the property tax on that home — typically $2,000-4,000/year in Tennessee — while also paying zero state income tax on their compensation. Compare that to states that have both income taxes on military retirement and partial (rather than full) property tax exemptions, and the Tennessee advantage compounds to tens of thousands of dollars over a typical retirement horizon.
Tennessee also benefits from the significant military presence at Fort Campbell — home of the 101st Airborne Division — which creates a large, established veteran community with active VSOs, veteran employment networks, and veteran-friendly businesses throughout the Clarksville metro area and the Nashville region.
Tennessee's complete absence of a broad state income tax is the most financially significant benefit for military retirees and disabled veterans living in the state. As of January 1, 2021, with the full repeal of the Hall Income Tax, Tennessee veterans pay zero state income tax on every dollar of income — including:
Prior to 2021, Tennessee levied the Hall Income Tax on dividends and interest income — not on wages or salaries, but on investment income. This tax affected some veterans with investment portfolios but did not apply to earned income or retirement pay. The Hall Income Tax was phased out and fully repealed effective January 1, 2021. Today, Tennessee stands alongside Florida, Texas, and Alaska as one of the states with absolutely no state income tax of any type.
To illustrate the financial value: a Tennessee veteran receiving the 2026 TDIU rate of $3,938.58/month ($47,262.96/year) pays zero state income tax on that income. If that same veteran lived in a state with a 5% state income tax on disability compensation (some states do tax VA disability), they would owe approximately $2,363/year in state taxes. Over a 20-year TDIU period, that's $47,260 in state taxes that Tennessee veterans don't pay. Add in the property tax exemption savings and the total Tennessee advantage over a typical retirement can easily exceed $100,000.
The primary Tennessee property tax benefit for disabled veterans is found at Tenn. Code Ann. § 67-5-704, which provides a complete property tax exemption for the primary residence of veterans with a 100% permanent and total service-connected disability rating.
The exemption under § 67-5-704 covers the full value of the primary residence — there is no dollar cap on the exemption amount. A veteran with a $150,000 home and one with a $600,000 home both receive 100% exemption from property taxes on that home. This is more generous than many states that cap the exemption at a fixed dollar amount (often $100,000-$150,000 of assessed value).
Tennessee's effective property tax rates vary by county, but most Tennessee counties assess rates between 0.6% and 1.5% of assessed value annually. On a $300,000 home at a 1% effective rate, the exemption saves $3,000 per year. On a $400,000 home at 1.2%, it saves $4,800 per year.
| Home Value | Effective Tax Rate | Annual Tax Without Exemption | Annual Savings |
|---|---|---|---|
| $200,000 | 0.8% | $1,600 | $1,600 |
| $300,000 | 1.0% | $3,000 | $3,000 |
| $400,000 | 1.1% | $4,400 | $4,400 |
| $500,000 | 1.2% | $6,000 | $6,000 |
| $600,000 | 1.2% | $7,200 | $7,200 |
To claim the property tax exemption under § 67-5-704, veterans must:
The exemption does not automatically carry over to a new property. If you move, you must file a new application with the assessor in your new county. Some counties require annual renewal; others continue the exemption indefinitely once established. Confirm your county's requirements with the assessor's office directly.
The Tennessee property tax exemption requires 100% permanent and total designation, not just TDIU. If you have TDIU but not P&T, or if your rating is below 100%, you may be leaving significant money on the table. A free claim review can identify whether you're eligible for a higher rating or P&T designation that unlocks this exemption.
The property tax exemption, free hunting/fishing, and premium education benefits all require 100% P&T. Our VA-accredited attorneys can review your current rating and identify pathways to the designation you deserve.
Get Your Free Rating Review →Tennessee offers veterans and their families multiple pathways to educational funding through both direct veterans' statutes and broader education programs accessible to veterans.
Tenn. Code Ann. § 49-7-105 provides free tuition at Tennessee public colleges and universities for qualifying dependents of veterans. The specific qualifying categories include:
The § 49-7-105 waiver covers tuition at Tennessee Board of Regents (TBR) institutions — which include all Tennessee State University (TSU), Tennessee Tech, Austin Peay State University, East Tennessee State University, Middle Tennessee State University (MTSU), and all Tennessee Community Colleges — as well as the University of Tennessee system. This benefit is not means-tested; it is available regardless of household income.
Dependents receiving this waiver should coordinate with their school's veterans services office and the Tennessee Department of Veterans Services to ensure proper certification and processing. The waiver covers tuition but not all fees — room, board, and mandatory non-tuition fees may still be charged.
The Tennessee Student Assistance Award (TSAA) is Tennessee's primary need-based grant for undergraduate students. While not specifically a veterans' program, Tennessee veterans returning to school who have exhausted or are managing their federal GI Bill benefits and who demonstrate financial need may qualify for TSAA funding at approved Tennessee institutions.
TSAA awards vary based on financial need and fund availability. Veterans should apply through the Free Application for Federal Student Aid (FAFSA) to establish eligibility for TSAA and coordinate with the financial aid office of their chosen Tennessee institution about award amounts and renewal requirements. TSAA can be combined with other state and federal funding sources, though total aid cannot exceed the cost of attendance.
Tennessee Reconnect is one of the most veteran-friendly education programs in the South, providing free tuition and mandatory fees at Tennessee community colleges and Tennessee College of Applied Technology (TCAT) institutions for adult learners who do not hold a prior college degree.
Key Tennessee Reconnect facts for veterans:
The combination of the Post-9/11 GI Bill (Chapter 33) and Tennessee Reconnect can provide veterans with zero-cost community college attendance while also receiving a monthly housing allowance. Veterans should consult their institution's veterans services office to optimize their combined benefits package.
Tenn. Code Ann. § 8-50-303 establishes veterans' preference in Tennessee state government employment. This preference provides veterans with a tangible advantage in the competitive state hiring process:
Tennessee's veterans' preference under § 8-50-303 operates primarily as a tie-breaking mechanism and priority consideration in the state civil service hiring process. When two candidates are equally qualified, the veteran receives preference. For disability-rated veterans, the preference operates more aggressively — the veteran may be selected over a non-veteran even when the non-veteran has slightly higher examination scores, depending on the agency and position.
State agencies are required to affirmatively consider veterans in their hiring processes and report on veterans' hiring metrics. Veterans applying for Tennessee state jobs should clearly note their veteran status and honorable discharge on all state employment applications.
The Tennessee Department of Labor and Workforce Development operates American Job Centers (AJCs) throughout the state with dedicated Veterans Employment Representatives — Disabled Veterans Outreach Program (DVOP) specialists and Local Veterans Employment Representatives (LVERs) — who provide free individualized employment assistance to veterans. DVOPs specifically serve veterans with significant barriers to employment, including service-connected disabilities. Contact Tennessee TDOL at (615) 741-6642 or visit your nearest AJC for personalized veteran employment services.
Tennessee operates three State Veterans' Homes providing skilled nursing care, memory care, and domiciliary (assisted living) services to eligible Tennessee veterans. This multi-facility network represents one of the more comprehensive state veterans home systems in the Southeast.
The Murfreesboro facility is Tennessee's flagship state veterans home and the largest of the three, located in Rutherford County (Middle Tennessee). The facility provides skilled nursing care, rehabilitation services, and memory care for veterans with dementia or Alzheimer's disease. Its Middle Tennessee location makes it accessible to Nashville-area veterans and their families.
The Humboldt facility serves West Tennessee veterans, providing skilled nursing care, memory care, and domiciliary services. Located in Gibson County, it is accessible to veterans from Memphis, Jackson, and surrounding West Tennessee communities. The facility was expanded to meet the significant demand from West Tennessee's veteran population.
The Knoxville facility serves East Tennessee veterans with skilled nursing care and memory care services. Located in Knox County, it serves veterans from the Knoxville metro area, Oak Ridge, and the broader East Tennessee region including veterans from Fort Wainwright and Oak Ridge National Laboratory's significant veteran workforce.
To be eligible for a Tennessee State Veterans' Home, applicants must:
Contact the Tennessee Department of Veterans Services at (615) 741-2931 or visit tn.gov/veterans for current bed availability and the admissions process for each facility. Placement is subject to availability and may involve waiting lists during high-demand periods.
Veterans with a 100% service-connected disability rating — including those receiving TDIU at the 100% rate — are entitled to a free annual hunting and fishing license from the Tennessee Wildlife Resources Agency (TWRA).
The free license covers:
Veterans apply through TWRA by providing a copy of their VA disability letter confirming 100% service-connected disability (or TDIU letter confirming compensation at the 100% rate). The license is issued annually. Contact TWRA at (615) 781-6500 or visit tn.gov/twra for the current application process and any fee schedules for special licenses (waterfowl stamps, etc.) that may not be covered.
In addition to the 100% free license, Tennessee offers reduced-cost hunting and fishing licenses to veterans with any service-connected disability — contact TWRA for current partial-disability discount rates and eligibility thresholds.
Tennessee provides several vehicle-related benefits for disabled veterans:
Contact the Tennessee Department of Revenue at (615) 741-3101 or visit tn.gov/revenue for current registration fee waiver eligibility and plate application procedures.
Tennessee veterans have access to a well-distributed VA healthcare network through the VA Tennessee Valley Healthcare System (TVHS) and the Memphis VA Medical Center:
Alvin C. York campus, serving Middle Tennessee. Full-service tertiary care, mental health, surgery, oncology, and specialty services.
VA Tennessee Valley's second campus, serving South-Central Tennessee with primary care, mental health, and specialty clinics.
Mid-South VA Health Care System serving West Tennessee and the Memphis metro area. Full-service tertiary care facility.
Community-Based Outpatient Clinics in Chattanooga, Cookeville, Dover, Knoxville, Oak Ridge, Tullahoma, and additional locations.
Tennessee veterans with service-connected disabilities are enrolled in VA healthcare based on their rating:
Veterans rated at 100% P&T receive Priority Group 1 care with no copayments for all VA services — not just service-connected care — making VA healthcare effectively free for these veterans.
Tennessee's military installation presence is anchored by the massive Fort Campbell complex on the Tennessee-Kentucky border and reinforced by several important federal facilities:
Fort Campbell is home to the legendary 101st Airborne Division (Air Assault) — the "Screaming Eagles" — and is one of the largest military installations in the United States by active duty population. Straddling the Kentucky-Tennessee border with the main cantonment area in Montgomery County, Tennessee (Clarksville), Fort Campbell has a profound economic and demographic impact on Middle Tennessee. The fort contributes significantly to the Clarksville metro area's population of veterans — Clarksville consistently ranks among the top metro areas per capita for veteran population in the U.S.
Fort Campbell also hosts the 160th Special Operations Aviation Regiment (SOAR), 5th Special Forces Group, and numerous support units. The installation includes significant military family services, a full commissary and exchange, and robust veteran support infrastructure.
Arnold Air Force Base in Tullahoma, Tennessee is home to the Arnold Engineering Development Complex (AEDC), the largest flight simulation test facility in the world. While not a large installation by population, AEDC employs a significant number of veterans with engineering and technical backgrounds.
NSA Mid-South in Millington (near Memphis) hosts numerous Navy tenant commands and is a significant employer of active duty, reserve, and civilian veteran personnel in West Tennessee.
To access the full suite of Tennessee veteran benefits, follow these priority steps:
Tennessee's best benefits — the full property tax exemption, free hunting/fishing, 100% P&T pay — require the right federal rating. Our VA-accredited attorneys can review your current rating for free and identify what you're owed.
Start Your Free Tennessee Benefits Review →The § 67-5-704 property tax exemption specifically requires 100% permanent and total service-connected disability. Veterans with TDIU but without P&T designation may not automatically qualify. Veterans with TDIU should also request P&T designation from the VA — if granted, P&T then satisfies the § 67-5-704 requirement. Consult with the county assessor about their specific documentation requirements and whether a TDIU award letter satisfies the 100% requirement in your county.
Yes, under certain conditions. The surviving spouse of a veteran who died from a service-connected cause may qualify for the property tax exemption under § 67-5-704. The spouse must not remarry and must continue to own and occupy the primary residence. Contact your county assessor for specific documentation requirements for surviving spouse exemption claims.
The Tennessee Department of Veterans Services (TDVS) has offices statewide. Call (615) 741-2931 or visit tn.gov/veterans to find the nearest county veteran service officer. National VSOs including the VFW, DAV, American Legion, and Vietnam Veterans of America all have chapters throughout Tennessee and provide free claims assistance.
Other strong military-friendly states include Idaho (full property tax exemption, tax-free military retirement), Alaska (significant state benefits), Arizona (military retirement tax-free for some categories), and California (comprehensive CalVet programs). For no-income-tax states with strong military populations, Texas and Florida also offer competitive benefit packages.