Compare taxes and see how much you save moving from Alabama to Tennessee
Alabama has progressive income tax rates from 2% to 5%, while Tennessee has no state income tax (0%). Moving to Tennessee saves $4,667/year on $100k income. Alabama has lower property taxes (0.41% lowest in US vs TN's 0.67%). However, both states have extremely high sales taxes (AL 9.29%, TN 9.55% highest). Overall, Tennessee offers significant tax savings for wage earners. The AL-TN border sees migration to Nashville for jobs and zero income tax.
Progressive
3 brackets, up to 5%
No Income Tax
Constitutional prohibition
At $100,000 income:
That is $389/month back in your pocket!
| Income | AL Tax | TN Tax | Savings | 10-Year |
|---|---|---|---|---|
| $50,000 | $2,167 | $0 | $2,167 | $21,670 |
| $100,000 | $4,667 | $0 | $4,667 | $46,670 |
| $200,000 | $9,667 | $0 | $9,667 | $96,670 |
| $500,000 | $24,667 | $0 | $24,667 | $246,670 |
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Moving from Alabama to Tennessee? Multi-state returns are tricky—AL has income tax, TN doesn't. Get matched with a CPA who specializes in Deep South state moves.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get Matched With a CPA →On $100,000 income, Tennessee saves $4,667/year in income tax (AL 4.67% vs TN 0%). However, TN property tax is higher (0.67% vs AL 0.41% lowest in US). On a $400k home, TN pays $2,680/year vs AL $1,640/year—difference of $1,040/year. Net savings: $3,627/year. Over 10 years: $36,270. Plus Nashville has better job market and salaries are 15-25% higher.
Alabama has lowest property tax in US (0.41%) due to: constitutional limits on property assessment increases, strong anti-tax culture, agricultural exemptions. Schools funded more by sales/income taxes. However, this means AL has 5% income tax while neighboring TN has 0%. For homeowners, AL property tax advantage partially offsets income tax disadvantage.
Yes, heavy AL → TN migration. In 2023, 16,204 people moved AL → TN (vs 8,472 TN → AL), net gain of 7,732 for Tennessee. Migration drivers AL → TN: no income tax (save $4,667+ annually), Nashville boom (better jobs), better schools (#32 vs #47). Reverse migration (TN → AL) driven by: cheaper housing (Birmingham 47% cheaper), lowest property tax in US (0.41%), college football culture.
Nashville wins economically: no income tax (save $3,627 annually), larger job market (2M vs 1.1M), tech/healthcare boom, better schools (#32 vs #47). Birmingham wins for: cheaper housing (47% cheaper), lowest property tax in US (0.41%), lower cost of living (18% cheaper). Choose Nashville for career opportunities. Choose Birmingham for maximum affordability.