which two states only tax interest and dividend income
Tennessee is gradually reducing its Hall tax on interest and dividend income. The state's 6 percent Hall tax rate reduced to 5 percent in 2016, and the rate will continue to drop in one percent increments each year thereafter until the tax is completely eliminated in 2022.
New Hampshire only collects income tax on qualifying investment, dividend, and interest income. The tax only applies if you earn over a certain threshold of investment income. Most of the state's revenues come from property taxes.