Economy of Tennessee facts for kids
The U.S. state of Tennessee has a very interesting and varied economy. This means it has many different ways of making money. Industries like manufacturing (making things in factories), agriculture (farming), healthcare, and tourism (people visiting for fun) are all important. Big companies like FedEx, the world's largest package delivery service, and AutoZone, a huge store for car parts, have their homes here.
Farming is a big deal in Tennessee. The state grows a lot of soybeans, tobacco, and cotton. Nashville is a major center for healthcare, with many hospitals and research facilities. Tourism also brings in lots of money. Millions of visitors come each year to see Tennessee's beautiful nature, like the Great Smoky Mountains National Park, and its famous music history, such as the Country Music Hall of Fame.
Contents
Exploring Tennessee's Economy
Tennessee's economy is strong and growing. In 2020, the total value of all goods and services produced in the state was about $364.5 billion. This shows how much activity happens here!
In 2019, the average personal income for people in Tennessee was around $29,859. The typical household earned about $58,516 in 2021. About 13.9% of people lived with very little money.
Tennessee is known as a state with low taxes. It's one of only nine states that does not have a general state income tax. This means people don't pay a tax on the money they earn from their jobs to the state government. Instead, the main way the state government gets money is through sales tax.
The state's sales tax rate for most items is 7%. This is one of the highest in the country. However, food items are taxed at a lower rate of 4%. Local governments also collect sales taxes, which can make the total sales tax rate higher, averaging about 9.5%. This is the highest average sales tax in the nation. While sales tax funds the state, property taxes are the main way local governments get money for things like schools and roads.
Farming in Tennessee
Tennessee has many farms, ranking eighth in the nation. Farms cover more than 40% of the state's land. Each farm is about 155 acres (0.63 km2) on average. Farming and related activities bring in an estimated $81 billion to the state's economy each year.
Top Crops and Livestock
Beef cattle are the state's largest farm product. Tennessee ranks 12th in the country for the number of cattle. More than half of the state's farmland is used for grazing cattle.
Soybeans are the most common crop grown. After soybeans, corn and cotton are also very important. Most soybeans are grown in West and Middle Tennessee.
Tennessee is also a big producer of broilers and poultry (chickens and other birds).
Cotton has been grown in Tennessee for a long time. Today, Tennessee ranks seventh in the nation for cotton production. Most of it is still grown in the western part of the state. Tennessee has also been a top tobacco-producing state for much of its history, ranking fourth nationwide.
The Nashville Basin is a great area for horses. This is because the soil grows special grass that horses love. The Tennessee Walking Horse, a famous breed, was first raised here. The state also ranks second in the country for breeding mules and producing goat meat.
Horticulture (growing plants like flowers and trees) is important in Warren County. It's even called the "Nursery Capitol of the World"! Forests cover more than half of Tennessee. The timber industry, which cuts down trees for wood, is mainly found on the Cumberland Plateau. This area is known for producing a lot of hardwood.
Factories and Making Things
_(cropped).jpg)
Before World War II, Tennessee was mostly a farming state. But after the Civil War, Chattanooga became an early industrial city with many factories. Big growth in factories started in the 1930s and 1940s with projects like the Tennessee Valley Authority.
Today, Tennessee has over 2,400 advanced manufacturing businesses. They produce more than $29 billion worth of goods every year. The top things made in Tennessee include cars and transportation products, processed foods and drinks, chemicals, electrical equipment, and metal products.
Cars and Trucks
Since the 1980s, Tennessee has become a major center for making cars. This is now the biggest manufacturing sector in the state. Nissan's factory in Smyrna is the largest car assembly plant in North America.
Three other car makers also have factories in Tennessee: General Motors in Spring Hill, Van Hool in Morristown, and Volkswagen in Chattanooga. Ford opened an assembly plant in Stanton in 2025. Also, Mullen Technologies is building a plant in Memphis. More than 900 companies that supply parts for cars are also located here. Nissan moved its North American headquarters to Franklin in 2005, and Mitsubishi Motors did the same in 2019.
Food and Drinks
Making food and drinks has been important in Tennessee since the late 1800s. Today, it's the second-largest manufacturing sector. The world's first Coca-Cola bottling plant opened in Chattanooga in 1899.
Other famous brands made in Tennessee include Jack Daniel's, George Dickel, Mountain Dew, Mayfield ice cream, Goo Goo Cluster candies, Moon Pies, Bush's Beans, Little Debbie snacks, M&M's, and Pringles.
Other Important Products
Tennessee is a top producer of chemicals, especially those not made from oil. These include industrial chemicals, paints, pharmaceuticals (medicines), plastic resins, and soaps and hygiene products. Eastman Chemical Company has its headquarters in Kingsport.
The state also makes a lot of consumer electronics, electrical appliances, and other electrical equipment. Brands like Monogram Refrigeration, Whirlpool, LG Electronics, and Electrolux have made products here. Other important items made in the state include machinery and fabricated metal products.
Big Businesses and Innovation
Tennessee is home to many different types of businesses. Its largest service industries include healthcare, transportation, music and entertainment, and banking.
Leading Companies
Many large companies have their main offices in Tennessee. These include FedEx, AutoZone, International Paper, and First Horizon Corporation, all based in Memphis. Pilot Corporation and Regal Entertainment Group are in Knoxville. Hospital Corporation of America and Caterpillar Inc. are based in Nashville. Unum is in Chattanooga. Dollar General is in Goodlettsville.
Science and Research Centers
The research and development industry is also a big employer in Tennessee. This is mainly because of the important work done at Oak Ridge National Laboratory (ORNL) and the Y-12 National Security Complex in Oak Ridge.
ORNL does scientific research in many areas. These include materials science (studying how materials work), nuclear physics, energy, supercomputing, and systems biology (studying how living things work). It is the largest national laboratory in the Department of Energy system.
The area between Oak Ridge and Knoxville is known as the Tennessee Technology Corridor. More than 500 high-tech companies are located here. The technology sector is also growing fast in the Nashville area. In 2018, Amazon opened a large operations center in Nashville, planning to employ about 5,000 people.
Powering the State
.jpg)
Tennessee gets its electricity from various sources. As of 2020, the Tennessee Valley Authority (TVA) owned most of the state's power-generating facilities.
Electricity for Everyone
Nuclear power is Tennessee's biggest source of electricity. It produced about 47.3% of the state's power in 2020. Other sources include natural gas (20.2%), coal (18.4%), hydroelectric power (13.4%), and other renewable energy sources (1.6%). About 61.3% of the electricity made in Tennessee produces very little greenhouse gas emissions.
Tennessee is home to the two newest civilian nuclear power reactors in the United States. These are at the Watts Bar Nuclear Plant in Rhea County. Unit 2 started working in 2016, making it the first new nuclear power reactor to begin operating in the U.S. in the 21st century.
Tennessee was also an early leader in hydroelectric power, which uses water to make electricity. The United States Army Corps of Engineers and the TVA built several hydroelectric dams on Tennessee rivers. Tennessee is the third-largest producer of hydroelectric power east of the Rocky Mountains.
Mining for Resources
Tennessee has very little oil and natural gas. However, it does have one oil refinery in Memphis. Bituminous coal is mined in small amounts in the Cumberland Plateau.
Tennessee is the nation's leading producer of ball clay, which is used to make ceramics. Other important minerals found in Tennessee include sand, gravel, crushed stone, Portland cement, marble, and zinc.
The Copper Basin in Polk County was a very active copper mining area for many years. Mining activities there caused significant environmental damage in the past. However, a lot of work has been done to restore the area.
Fun and Tourism
Tourism brings billions of dollars to Tennessee's economy every year. It is the 11th-most visited state in the nation. In 2019, a record 126 million people visited the state. This led to $23.3 billion being spent by tourists. Tourism also created 195,000 jobs in the state.
Amazing Places to Visit
Tennessee is home to the Great Smoky Mountains National Park. It is the most visited national park in the U.S., with over 12 million visitors each year. This park helps a big tourism industry in nearby Gatlinburg and Pigeon Forge. Attractions there include Dollywood, Ober Gatlinburg, and Ripley's Aquarium of the Smokies.
In Memphis, major attractions include Graceland, the home of Elvis Presley, Beale Street, the National Civil Rights Museum, and the Memphis Zoo. Nashville has many places related to its music history. These include Lower Broadway, the Country Music Hall of Fame, the Ryman Auditorium, and the Grand Ole Opry. Other Nashville attractions are the Tennessee State Museum and The Parthenon.
Chattanooga offers Lookout Mountain, the Chattanooga Choo-Choo Hotel, Ruby Falls, and the Tennessee Aquarium. The Tennessee Aquarium is the largest freshwater aquarium in the United States. Other fun places include the American Museum of Science and Energy in Oak Ridge and the Bristol Motor Speedway in Bristol.
Historical Sites and Nature
Four Civil War battlefields in Tennessee are protected by the National Park Service. These are Chickamauga and Chattanooga National Military Park, Stones River National Battlefield, Shiloh National Military Park, and Fort Donelson National Battlefield.
Big South Fork National River and Recreation Area is in the Cumberland Mountains. Other historical sites include Cumberland Gap National Historical Park and the Trail of Tears National Historic Trail.
Tennessee has 45 state parks, covering about 132,000 acres (534 km2). Many lakes created by the TVA for electricity also offer great places for water activities and real estate development.
