Tennessee vs Georgia Taxes
Compare the total tax burden between Tennessee (no income tax) and Georgia (4.99% flat). Enter your income to see which state saves you more.
| Tax Component | Tennessee | Georgia |
|---|---|---|
| Federal tax | $13,170 | $13,170 |
| State tax | $0 | $4,242 |
| FICA | $7,650 | $7,650 |
| Total tax | $20,820 | $25,062 |
| Take-home | $79,180 | $74,939 |
| Effective rate | 20.82% | 25.06% |
| Annual Difference | $4,242 less | $4,242 more |
The $4,242 difference is primarily because Georgia has a flat 5.2% income tax, while Tennessee has no state income tax. At your income level, Georgia's marginal rate is 5.0%.
Why the difference
You'd pay $4,242/year ($353/month) more in Georgia vs Tennessee.
Tax structure
Tennessee has no state income tax, while Georgia has a flat 5.2% state income tax.
Effective rate at your income
At $100,000, Tennessee's effective state rate is 0.0% vs 4.2% in Georgia — a 4.2 percentage point gap.
Tip: No tax on wages or investment income makes Tennessee tax-efficient for both earners and retirees. The high sales tax is the trade-off — factor this into cost-of-living comparisons.
Tip: Georgia's transition to a flat rate simplifies tax planning. The state's generous standard deduction ($15,000 single) reduces the effective rate, especially for lower-income earners. Combined with below-average cost of living, Georgia offers a balanced tax environment.
Tennessee Total Tax
20.82% effective rate
Georgia Total Tax
25.06% effective rate
Annual savings
by living in Tennessee
Georgia vs Tennessee: Atlanta's income tax meets Nashville's zero-tax boom
Georgia and Tennessee share a 37-mile border in the Appalachian foothills, but the tax regimes couldn't be more different. Georgia imposes a 4.99% flat income tax rate (2026, down from 5.19% in 2025 and 5.49% in 2024 as the state completed its conversion from graduated brackets), while Tennessee charges zero state income tax on wages and salaries. Tennessee eliminated its last remaining income tax—the Hall Tax on interest and dividends—in 2021, making it a pure no-income-tax state.
This divergence has fueled Nashville's explosive growth. The Nashville metro has grown by over 20% since 2010, attracting transplants from across the Southeast—including a steady stream from Atlanta. But Georgia has counter-advantages: Atlanta is one of America's most important corporate headquarters cities (home to Coca-Cola, Delta, UPS, Home Depot), and Georgia's overall cost of living remains lower than Nashville's increasingly expensive housing market.
Tennessee compensates for its zero income tax with a 7% state sales tax—one of the highest in the nation—plus local sales taxes on top. Georgia's 4% base sales tax is considerably lower. Property taxes also differ: Tennessee averages about 0.52% effective rate versus Georgia's 0.79%. The net calculation depends heavily on spending patterns and income level.
Key Differences Beyond Income Tax
| Category | Tennessee | Georgia |
|---|---|---|
| Sales Tax | Base rate 7%, plus local taxes; groceries taxed at reduced 4% state rate | Base rate 4%, plus local option sales taxes; groceries taxed at reduced local rates only |
| Property Tax | Effective rate ~0.52%; residential property assessed at 25% of market value | Effective rate ~0.79%; reassessed on county schedules |
| Cost of Living | Nashville increasingly expensive, with median home prices surpassing Atlanta; Knoxville and Memphis much cheaper | Atlanta metro affordable by major-city standards; suburbs and exurbs very low cost |
| Retirement Income | No state income tax on any income, including all retirement income | Social Security exempt; retirement income excluded up to $35,000 per person at 62–64 and $65,000 at 65 or older |
| Business Taxes | No corporate income tax, but franchise and excise taxes: 6.5% excise tax on net earnings plus 0.25% franchise tax on net worth | Corporate income tax at 4.99%; generous film and job creation tax credits |
Who Benefits from Moving?
High-earning professionals ($150K+)
A worker earning $150,000 pays about $6,737 in Georgia income tax (single filer). In Tennessee, that drops to $0. Even accounting for Tennessee's higher sales tax (roughly $1,500-$2,000 more annually on typical spending), the net savings are about $4,737-$5,237 per year.
Young professionals choosing between Atlanta and Nashville
A single earner making $75,000 saves about $2,994 in income tax by choosing Nashville over Atlanta. But Nashville's higher rents (averaging $200-$400/month more for comparable units) could eat into those savings. Run the full budget comparison before deciding.
Small business owners with pass-through income
A Georgia LLC owner with $200,000 in pass-through income pays roughly $9,232 in state income tax (single filer). Tennessee has no income tax on this, but does levy a 6.5% excise tax on net earnings for certain entity types. Sole proprietors and single-member LLCs typically avoid the excise tax, making TN clearly better for them.
Bottom line: At $150,000 income, moving from Atlanta to Nashville saves about $6,737 in state income tax, minus roughly $1,500–$2,000 in higher sales tax and potentially higher housing costs—netting $4,737–$5,237 in annual savings for most households.
Tax at Different Income Levels
| Income | Tennessee Total Tax | Georgia Total Tax | Annual Savings |
|---|---|---|---|
| $75,000 | $13,408 | $16,402 | +$2,994 |
| $100,000 | $20,820 | $25,062 | +$4,242 |
| $150,000 | $36,209 | $42,946 | +$6,737 |
| $200,000 | $51,073 | $60,305 | +$9,232 |
Based on single filer, standard deduction, 2026 tax year. Includes federal income tax, state income tax, and FICA.
Why the difference
You'd pay $4,242/year ($353/month) more in Georgia vs Tennessee.
Tax structure
Tennessee has no state income tax, while Georgia has a flat 5.2% state income tax.
Effective rate at your income
At $100,000, Tennessee's effective state rate is 0.0% vs 4.2% in Georgia — a 4.2 percentage point gap.
Tip: No tax on wages or investment income makes Tennessee tax-efficient for both earners and retirees. The high sales tax is the trade-off — factor this into cost-of-living comparisons.
Tip: Georgia's transition to a flat rate simplifies tax planning. The state's generous standard deduction ($15,000 single) reduces the effective rate, especially for lower-income earners. Combined with below-average cost of living, Georgia offers a balanced tax environment.
Understanding Each State
Tennessee
Tennessee has no state income tax on wages and no longer taxes investment income. Tennessee relies on a 7% state sales tax (one of the highest in the US, plus local additions), which particularly impacts lower-income residents who spend a larger share of income on taxable goods.
Tip: No tax on wages or investment income makes Tennessee tax-efficient for both earners and retirees. The high sales tax is the trade-off — factor this into cost-of-living comparisons.
Georgia
Georgia taxes income at a flat 4.99% for 2026 (it previously used progressive brackets). Georgia's overall cost of living is below the national average, and the state offers a standard deduction of $15,000 for single filers and $30,000 for married filing jointly.
Tip: Georgia's transition to a flat rate simplifies tax planning. The state's generous standard deduction ($15,000 single) reduces the effective rate, especially for lower-income earners. Combined with below-average cost of living, Georgia offers a balanced tax environment.
Key Comparison Points
Income tax structure: Tennessee has no state income tax, while Georgia has a flat income tax (4.99% flat).
Beyond income tax: State tax comparisons should also consider property tax rates, sales tax, and cost of living. A state with no income tax may have higher property or sales taxes that offset the savings.
SALT deduction cap: Under OBBBA, the 2026 federal SALT cap is $40,400, phasing out above $505,000 MAGI toward a $10,000 floor. This limits the federal tax benefit of living in a high-tax state, so the gross state tax difference remains close to the net difference for most earners — especially high earners inside the phaseout.
Frequently asked questions
Is it cheaper to live in Tennessee or Georgia?
Based on income tax alone, Tennessee has a lower tax burden. At $100K income, you'd save $4,242 annually in Tennessee compared to Georgia. However, total cost of living also depends on property taxes, sales taxes, and housing costs.
How much would I save moving from Georgia to Tennessee?
A single filer earning $100,000 would save approximately $4,242 per year in total taxes by living in Tennessee instead of Georgia. At $150,000 income, the savings change to $6,737 per year.
What is the income tax rate in Tennessee?
Tennessee has no state income tax.
What is the income tax rate in Georgia?
Georgia has a flat income tax with rates of 4.99% flat.
Does Tennessee have income tax?
No, Tennessee does not levy a state income tax. Residents pay only federal income tax and FICA. However, Tennessee may have higher property taxes or sales taxes to compensate.