United States
Cost of living in Tennessee
Cost of living in Tennessee measures at 91.9 on the regional price parity index, 8 percent below the US average and 38th nationally. Tennessee levies no state income tax on wages, having fully repealed the Hall tax on interest and dividends by 2021. The state sales tax base rate is 7 percent, one of the higher rates in the country and the primary mechanism through which the state funds public services in the absence of an income tax. That trade-off is consequential: a family spending $60,000 a year on taxable goods and services faces a notably higher consumption tax bill than in states with lower sales taxes, regardless of the zero income tax headline. Nashville's explosive growth over the past decade has pushed housing costs in Middle Tennessee sharply upward, while Memphis and many rural counties remain among the least expensive markets in the Southeast.
Price level
91.9
US = 100
National rank
38th
of 51, dearest first
Income tax
None
none
Sales tax
7%
state base rate
What your salary is worth in Tennessee
Because prices here sit at 91.9 against the national 100, the same paycheck stretches differently than it would elsewhere. These figures hold buying power constant: the salary listed is what you would need in Tennessee to live as you would on the reference amount in another place.
| Same lifestyle as | $60,000 | $100,000 |
|---|---|---|
| US average | $55,140 | $91,900 |
| California (dearest) | $49,810 | $83,017 |
| Arkansas (cheapest) | $63,452 | $105,754 |
Compare Tennessee with anywhere in the US
To live the same in California you need
$84,320
to match $70,000 in Tennessee
Price level, US = 100
The equivalent salary keeps your purchasing power constant: it is your pay scaled by the ratio of the two price levels. Regional Price Parities measure what a fixed basket of goods and services costs locally. Source: U.S. Bureau of Economic Analysis, 2024.
Tennessee in context
Tennessee's affordability at the statewide level masks a widening gap between its metros. Nashville and its suburbs now carry median home prices that rival markets in Virginia and Colorado, eroding much of the price-parity advantage for buyers in that corridor. Knoxville and Chattanooga have followed a similar but less extreme trajectory. Memphis, by contrast, remains one of the most affordable larger cities in the country, with median home prices well below $200,000. The 7 percent state sales tax, combined with county additions that push effective rates to 9 to 10 percent in many areas, represents a significant regressivity concern for lower-income households. For high earners relocating from states with double-digit marginal income tax rates, such as California or New York, the zero income tax often more than offsets the higher sales tax exposure. Tennessee suits earners in the upper-middle income range who have high disposable income relative to consumption.
The closest state above Tennessee on price is New Mexico at 92.2. Just below sits Missouri at 90.8.
Frequently asked questions
Is Tennessee expensive to live in?
Tennessee sits at a price level of 91.9 where the US average is 100, so a typical basket of goods and services costs about 8% less than the national norm. That ranks it 38th most expensive of 51 states. Housing is usually the largest single driver of the gap.
What salary do you need in Tennessee?
To match the buying power of $60,000 earned at the US average, you would need about $55,140 in Tennessee. The figure scales with the price level: a place dearer than average needs more, a cheaper one needs less. Your own number also depends on housing choice and household size.
How much tax does Tennessee charge?
Tennessee applies no state income tax and a base state sales tax of 7%. No state individual income tax on wages (Hall tax on interest/dividends fully repealed as of 2021). State sales tax base rate 7.0%. Local jurisdictions can add their own sales tax on top.
Cost of living in other states
Price levels are Regional Price Parities from the U.S. Bureau of Economic Analysis, Regional Price Parities (SARPP, MARPP), 2024 (public domain). State tax figures are the latest published rates from state revenue departments. All figures are estimates for general comparison and not financial advice; your own costs depend on housing, household size and lifestyle.