Tennessee’s quality of life is high, and its cost of living is low.
Based on 2017 annual averages, Tennessee has the 5th lowest cost of living in the nation at 10.2% below the national average.* In other words, on average, housing, food and groceries, transportation, utilities, healthcare and miscellaneous expenses such as clothing, service, and entertainment are less than the national average.
Let’s compare, by the numbers:
COMPOSITE INDEX – 89.9
GROCERY ITEMS – 93.5
HOUSING – 76.3
UTLITIES – 91.8
TRANSPORTATION – 93.8
HEALTHCARE – 89.4
MISCELLANEOUS GOODS AND SERVICES – 95.4
There is no state personal income tax in Tennessee. However, there is the Hall Income Tax, strictly on interest from bonds and notes and dividends from stock. Beginning with tax year 2012, the annual Hall Income Tax standard income exemptions for taxpayers 65 years of age or older increased from $16,200 to $26,200 for single filers and from $27,000 to $37,000 for joint filers. Legislation states that this tax will be eliminated Jan. 1, 2021.
Retirees can nurture their nest egg by relocating to a state with no tax on pensions. Tennessee has a perk for retirees: Dividends and interest are the only forms of income that Tennessee taxes.
The Tennessee state tax is five percent on food and food ingredients and seven percent on all other tangible personal property, unless specifically exempted. There is no tax on prescription drugs. Tennessee cities and counties have the option of imposing an additional local option sales tax. Visit the Tennessee Department of Revenue to obtain more information about Tennessee taxes.
Local taxes are set by the local government.
Tennessee has no state property tax. Property taxes are locally determined and collected.
*Source: CERT calculations using the Council for Community and Economic Research (C2ER) Cost of Living Index (COLI), 2017 Annual Averages