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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Tennessee VS COUNTRY B Texas

Side-by-side analysis of income tax, effective rates, and take-home pay for Tennessee and Texas in 2026.

Daniel · CountryTaxCalc Updated May 2026 Tax Comparison 2026
Calculate your take-home → See all comparisons →
OVERVIEW
Tennessee and Texas both offer 0% state income tax, making them top destinations for tax-conscious relocators. The key differences lie in other taxes: Tennessee has the nation's highest combined sales tax (9.55%) but low property taxes (0.48%). Texas has lower sales tax (8.24%) but high property taxes (1.60%). For homeowners, Tennessee often comes out ahead; for renters with high spending, Texas may be better.
Section 01

The Big Picture

Top-line rates and effective take-home for a typical earner — including income tax, social contributions, and applicable surcharges.
🎸
COUNTRY A
Tennessee
TAX RATE
0%
No Income Tax
Constitutional prohibition since 2014
🤠
COUNTRY B
Texas
TAX RATE
0%
No Income Tax
Constitutional prohibition on income tax
TYPICAL ANNUAL DIFFERENCE
Moving from Texas → Tennessee at $100,000
$0
Difference is in property/sales tax
Section 02

Tax Savings by Income Level

Net take-home after all income tax, social contributions, and surcharges — for a single employee with no dependents.
GROSS INCOME
🎸 TN TAX
🤠 TX TAX
SAVINGS
10-YEAR
$50,000
$0
$0
$0
$0
$75,000
$0
$0
$0
$0
$100,000
$0
$0
$0
$0
$150,000
$0
$0
$0
$0
$250,000
$0
$0
$0
$0
$500,000
$0
$0
$0
$0
💡

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🎸

Tennessee Pros & Cons

+ PROS
  • 0% state income tax (constitutional)
  • Very low property tax (0.48%)
  • Lower housing costs than TX metros
  • No estate or inheritance tax
− CONS
  • Highest combined sales tax (9.55%)
  • Smaller job market than Texas
  • Limited major metro areas
  • Fewer corporate headquarters
🤠

Texas Pros & Cons

+ PROS
  • 0% state income tax (constitutional)
  • Diverse major metros (Houston, Dallas, Austin)
  • Large job market
  • Lower sales tax than TN (8.24%)
− CONS
  • High property tax (1.60%)
  • Extreme summer heat
  • Rising housing costs in Austin
  • No cap on property value increases
FAQ

Frequently Asked Questions

Which is cheaper overall, Tennessee or Texas?

For homeowners, Tennessee often wins. A $400K home costs ~$1,920/year in TN property tax vs ~$6,400 in TX—a $4,480 annual difference. Texas wins on sales tax (8.24% vs 9.55%), but you'd need to spend $340,000+ annually for TX sales tax savings to offset the property tax difference.

Do both states have constitutional income tax bans?

Yes. Tennessee's constitution was amended in 2014 to prohibit income tax on wages (Article II, Section 28). Texas constitution (Article VIII, Section 24-a) requires voter approval for any income tax, which has never passed. Both provide strong long-term certainty.

What about cost of living beyond taxes?

Tennessee generally has lower housing costs. Nashville median home: ~$450K. Austin: ~$550K. Houston: ~$350K. Dallas: ~$400K. Tennessee's lower property taxes amplify housing affordability. However, Texas has more diverse job markets in tech, energy, and healthcare.

Which state is better for retirees?

Tennessee edges ahead for retirees. Neither taxes retirement income or Social Security. But Tennessee's 0.48% property tax saves retirees thousands annually on their home. Tennessee also has no estate tax. Both are in the top 10 most tax-friendly states for retirees.
From the brief
PT38.4%−9.6 vs. headline
CY17.8%incl. 60-day rule
AE 0.0%substance required
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