State profile
Tennessee Cost of Living Comparison
Tennessee's 2024 price level is 91.870, 8.13% below the national level; it does not tax wages, its utilities are the third-cheapest in the country (72.137), and sales tax supplies most of the state's revenue.
Updated
91.870Tennessee all-items price level, U.S. = 100 · rank 14 of 51, lowest first
| Measure | Tennessee | New Mexico | First − second |
|---|---|---|---|
| All-items price level | 91.870 | 92.212 | −0.342 points |
| Rent price level | 79.070 | 73.611 | +5.459 points |
| Home value | $286,700±$1,492 | $248,100±$1,957 | +$38,600 |
| Two-bedroom gross rent | $1,143±$10 | $1,062±$17 | +$81 |
| Household income | $69,595±$429 | $64,059±$808 | +$5,536 |
| Real estate taxes paid | $1,442±$8 | $1,731±$19 | −$289 |
$4,000 of monthly spending in Tennessee scales to $4,015 in New Mexico at the 2024 all-items price ratio.
BEA 2024 and ACS 2020–2024; ± marks the Census 90% margin. How to read a gap
Tennessee: no wage tax, a sales-tax state with eight neighbours
The cost of living in Tennessee is below average in every category. Utilities rank third-lowest of 51, other services (95.142) sixth, rents (79.070) 19th and goods (96.247) 20th. The two-bedroom gross-rent median is $1,143, rank 32, and the median home value $286,700, rank 29.
Tennessee does not tax wages. Its constitution, as recorded by the General Assembly in 2013, allows a state tax on income only from stocks and bonds, and the Hall income tax on interest and dividends was repealed for tax periods beginning January 1, 2021; individual income tax was 0.0% of fiscal 2025 collections. The state instead relies on a 7% general sales tax plus a local rate, and general sales supplied 57.5% of collections, $2,010 per resident. Total collections were $3,496 per resident, rank 38.
Property is light for owners: only six jurisdictions have a smaller median property-tax bill than Tennessee's $1,442.
Incomes trail prices only slightly. Low prices lift Tennessee seventeen places, from 42nd on household income to 25th on price-adjusted income per person ($58,582), close to the U.S. figure.
The relative price level rose from 90.502 in 2020 to a peak of 92.094 in 2023 and eased to 91.870 in 2024.
Tennessee borders eight states, from Mississippi (86.953) and Arkansas (86.937) to Virginia (101.104). North Carolina (94.326) and Georgia (96.293) are a little dearer; Florida, which also skips a wage tax, is compared on its own page. New Mexico (92.212) is the closest price level nationally.
Category price levels in Tennessee
| Category | Parity | Rank, low first | vs U.S. |
|---|---|---|---|
| All items | 91.870 | 14 | 8.13% below |
| Goods | 96.247 | 20 | 3.75% below |
| Housing (rents) | 79.070 | 19 | 20.93% below |
| Utilities | 72.137 | 3 | 27.86% below |
| Other services | 95.142 | 6 | 4.86% below |
| Real income per person, 2017 $ | $58,582 | 25 | U.S. $59,195 |
All items by year: 2020 90.502 · 2021 90.580 · 2022 91.800 · 2023 92.094 · 2024 91.870 (+1.368 since 2020). How to read categories and trends
Monthly housing costs
- Owners with a mortgage
- $1,566±$8 · rank 39, high first
- Owners without a mortgage
- $464±$2 · rank 44
- Renters: gross rent / income
- 29.5%±0.2 · rank 22
Tennessee state tax collections, FY2025
$25.57 billion in total, $3,496 per resident. Scope of these figures
| Tax | FY2025 | Share | Per resident |
|---|---|---|---|
| Individual income | $2.1 million | 0.0% | $0 |
| General sales | $14.70 billion | 57.5% | $2,010 |
| Property | not levied | ||
| Motor fuel | $1.29 billion | 5.0% | $176 |
| Other selective sales | $4.31 billion | 16.8% | $589 |
| Corporate income | $2.59 billion | 10.1% | $354 |
| Licenses | $2.27 billion | 8.9% | $311 |
| Severance | $0.5 million | 0.0% | $0 |
| Other taxes | $414.4 million | 1.6% | $57 |
Tennessee income tax on wages
Tennessee does not tax wages. The General Assembly's Senate Joint Resolution 1 (2013) records that Article II, Section 28 of the Tennessee Constitution allows a state tax on income only from stocks and bonds, and it put on the 2014 ballot an amendment barring any state or local tax on payroll or earned personal income. The Department of Revenue says the Hall income tax on interest and dividends was repealed for tax periods beginning January 1, 2021.
Read : Tennessee Department of Revenue: Hall income tax and Senate Joint Resolution 1, 108th General Assembly. Price parities exclude income taxes.
Tennessee sales tax
Tennessee's general state sales tax rate is 7%, and a local rate set by the county or city is added. The Department of Revenue says sales tax supplies about 60% of all state tax collections.
Tennessee beside its neighbours
| Jurisdiction | All items | Rents | Goods | 2BR rent |
|---|---|---|---|---|
| Tennessee | 91.870 | 79.070 | 96.247 | $1,143 |
| Alabama | 88.823 | 61.785 | 96.399 | $960 |
| Arkansas | 86.937 | 58.203 | 93.597 | $907 |
| Georgia | 96.293 | 88.694 | 98.929 | $1,326 |
| Kentucky | 90.159 | 64.313 | 95.967 | $968 |
| Mississippi | 86.953 | 56.456 | 96.219 | $913 |
| Missouri | 90.817 | 69.880 | 96.299 | $1,027 |
| North Carolina | 94.326 | 81.364 | 96.621 | $1,164 |
| Virginia | 101.104 | 106.799 | 100.368 | $1,481 |
Before you budget a move
A Tennessee comparison should distinguish ordinary individual income-tax treatment from the total household budget. The BEA price index includes consumption prices, while housing contracts, purchase taxes and address-specific ownership expenses require separate inputs. A relocation decision needs actual recurring cash costs and the offered compensation.
For Nashville-area, Memphis-area, Knoxville-area or another destination, compare the same dwelling size and commute requirements. A statewide rental median cannot identify utilities included in one lease. Keep moving charges, deposits and down payments separate from the annual living-cost estimate so first-year cash remains visible.
Reviewed by the State Cost Compare Editorial Team · Review policy · Report a correction