HIT-14 - Examples of Nontaxable Dividends and Interest


  • From stock in national banks (Not holding companies - See Taxable Dividends)
  • From stock in state banks in Tennessee (Not holding companies - See Taxable Dividends)
  • From federal and other building and/or savings and loan associations situated in Tennessee
  • From stock in insurance companies licensed to do business in Tennessee (Not holding companies - See Taxable Dividends)
  • From insurance policies   
  • From credit unions (No income from a credit union is taxable.)      
  • Percentage of income from mutual funds or investment trusts that was derived from obligations of the U.S. Government or the state of Tennessee and its political subdivision                       


  • On bonds of state of Tennessee, its counties, municipalities or other political subdivisions
  • On bonds of U.S. Government and its agencies (Interest on investments backed or guaranteed by the U.S. Government is taxable. For example, interest in connection with investments in the Federal National Mortgage Association, Government National Mortgage Association, or Federal Home Loan Mortgage Corporation is taxable.)
  • On certificates of deposit held inside or outside Tennessee                                    
  • On commercial paper and other written obligations that mature in six months or less from date of issue
  • On oral agreements
  • On insurance policies if such interest is payable on demand 
  • On loans made to qualified businesses for improvements, expansions, or operations within an "Enterprise Zone" and mortgages on real property within an "Enterprise Zone" (See Title 13, Chapter 28, Tennessee Code Annotated.)
  • On repurchase agreements or similar evidences of indebtedness
  • On savings accounts, checking accounts, and money market accounts located inside or outside Tennessee. (Not money market funds - See Taxable Dividends)
  • On credit union accounts or certificates of deposit (No income from a credit union is taxable.)
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