Tennessee vs Kentucky: which really costs more?
Neighbors on opposite sides of the income tax question.
Both layers pull in the same direction here. Income tax and sales tax each differ by enough to matter, so the gap builds up twice rather than once. The purchase they disagree about most is home purchase. After that it is car purchase and then car payment or lease. Everything below is sorted the same way, biggest gap first, so the things that barely differ sink to the bottom where they belong.
Neighbors on opposite sides of the income tax question, with a heavily-crossed border.
Both the income tax differential and the combined sales tax differential are material and same-signed, so the two layers compound rather than offset. Largest absolute divergence by category: home purchase. Then car purchase, then car payment or lease.
Tennessee
- Income tax rate
- none
- On a $75,000 salary
- 0%
- Rank of 51
- 43
- Combined sales tax
- 9.61%
- Rank of 51
- 3
Kentucky
- Income tax rate
- 3.5%
- On a $75,000 salary
- 3.34%
- Rank of 51
- 31
- Combined sales tax
- 6%
- Rank of 51
- 38
Beyond income and sales tax
A home costs more to keep in Kentucky, where property tax takes 0.75% of its value each year. In Tennessee it is 0.5%. Neither state taxes what you leave behind when you die. Gas carries a similar state tax in both: 26¢ a gallon in Tennessee, 25¢ in Kentucky.
Effective property tax rate: about 0.75% of market value in Kentucky against about 0.5% in Tennessee — a holding cost the income and sales tax figures above do not capture. Neither levies an estate tax. State gasoline excise: 26¢ per gallon in Tennessee, 25¢ in Kentucky.
The income tax figure is what one person earning $75,000.00 pays to the state, as a share of that pay. The sales tax figure is the combined state and local rate. Both come from the same checked data the calculator uses.
Income tax is the effective state rate at $75,000 for a single filer, not a marginal rate. Sales tax is the combined state and local rate at each state's representative county where one is modeled, and a statewide average for the forty-five jurisdictions that carry no named county. Both figures come from the same verified datasets the calculator uses.
Tennessee against Kentucky
A $75,000 salary
| Measure | Tennessee | Kentucky |
|---|---|---|
| Take-home pay | $61,593 | $59,085 |
| Worth after local prices | $66,576 | $65,311 |
| Share of pay taxed | 17.88% | 21.22% |
| State sales tax | 7% | 6% |
| Groceries exempt here | No | Yes |
| Clothing exempt at $100 | No | No |
| Property tax rate | 0.5% | 0.75% |
| Price level | 92.5 | 90.5 |
| Housing prices | 77.9 | 62.9 |
| Fuel tax | 26¢ | 25¢ |
| Tobacco tax | $0.62 | $1.10 |
City income tax excluded. Sales-tax row: state-only. Exemptions: Tennessee, Statewide average; Kentucky, Statewide average. Clothing: one $100 item; higher prices can change tax.
Where each state is strong
A $75,000 salary
Further out is better on every axis. Axes use fixed national ranges, not the two states alone.
Where each state takes it
A $75,000 salary
- Income
- Sales
- Property
| Tax | Tennessee | Kentucky |
|---|---|---|
| Income, all levels | $13,408 | $15,915 |
| Sales, on that spending | $1,293 | $1,064 |
| Property, on that home | $1,006 | $1,502 |
Assumes 30% of take-home spent on taxable goods and a $200,000 home. Three bases, so never summed.
What gets taxed, in each
A $75,000 salary
Tennessee
Statewide average
Kentucky
Statewide average
- Sales tax
- Fuel
- Tobacco
| Category | Tennessee | Kentucky |
|---|---|---|
| Groceries | 5.49% | Exempt |
| Clothing at $100 | 9.61% | 6% |
| Fuel | 26¢ | 25¢ |
| Tobacco | $0.62 | $1.10 |
Grocery and general rates use the locations named here. Clothing is one item priced at $100; a more expensive garment may be taxed differently. Fuel and tobacco have separate units and scales.
What you would need there
A $75,000 salary
| To match take-home only | $78,751 |
|---|---|
| Raise you would need | +$1,712 |
| Prices in Kentucky | 90 vs 93 |
State taxes and state price levels only. No city tax, and no housing market.
What things actually cost in each
These are the amounts you would need to earn before tax to pay for each thing, at a $75,000.00 salary. Biggest gaps first.
Gross income required at $75,000, using each category's default assumptions, sorted by the absolute difference between the two states.
| Category | Tennessee | Kentucky | Difference |
|---|---|---|---|
| Home purchase | $1,101,182 | $1,189,806 | $88,624 cheaper in Tennessee |
| Car purchase | $133,414 | $137,815 | $4,401 cheaper in Tennessee |
| Car payment or lease | $16,529 | $17,394 | $865 cheaper in Tennessee |
| Wedding | $46,742 | $47,593 | $851 cheaper in Tennessee |
| Funeral | $11,372 | $11,967 | $595 cheaper in Tennessee |
| Phone plan | $9,794 | $10,307 | $513 cheaper in Tennessee |
| Coffee habit | $25,622 | $26,076 | $453 cheaper in Tennessee |
| Used car from a private seller | $18,697 | $19,028 | $331 cheaper in Tennessee |
| Rent | $2,559 | $2,693 | $134 cheaper in Tennessee |
| Jewelry | $5,453 | $5,550 | $97 cheaper in Tennessee |
| Childcare | $1,564 | $1,645 | $82 cheaper in Tennessee |
| Hotel stay | $994 | $1,046 | $52 cheaper in Tennessee |
| Pet annual cost | $2,412 | $2,455 | $43 cheaper in Tennessee |
| Furniture | $2,337 | $2,378 | $41 cheaper in Tennessee |
| Health insurance premium | $640 | $673 | $33 cheaper in Tennessee |
| Laptop or phone purchase | $1,870 | $1,903 | $33 cheaper in Tennessee |
| Major appliance | $1,714 | $1,744 | $30 cheaper in Tennessee |
| Gift card | $569 | $598 | $30 cheaper in Tennessee |
| Student loan payment | $569 | $598 | $30 cheaper in Tennessee |
| Rental car | $407 | $436 | $29 cheaper in Tennessee |
| Sofa bed | $1,558 | $1,586 | $28 cheaper in Tennessee |
| Vet visit | $512 | $539 | $27 cheaper in Tennessee |
| Mattress | $1,402 | $1,427 | $25 cheaper in Tennessee |
| Winter tires | $1,402 | $1,427 | $25 cheaper in Tennessee |
| Domestic flight | $466 | $490 | $24 cheaper in Tennessee |
| Tires | $1,246 | $1,269 | $22 cheaper in Tennessee |
| Bicycle | $1,091 | $1,110 | $19 cheaper in Tennessee |
| Espresso machine | $1,091 | $1,110 | $19 cheaper in Tennessee |
| Office chair | $935 | $951 | $17 cheaper in Tennessee |
| Utilities | $299 | $314 | $16 cheaper in Tennessee |
| Theme park day | $791 | $806 | $15 cheaper in Tennessee |
| Air conditioner | $779 | $793 | $14 cheaper in Tennessee |
| Back-to-school clothes | $779 | $793 | $14 cheaper in Tennessee |
| Games console | $779 | $793 | $14 cheaper in Tennessee |
| Lawn mower | $701 | $714 | $12 cheaper in Tennessee |
| Car insurance | $235 | $247 | $12 cheaper in Tennessee |
| Camping gear | $662 | $674 | $12 cheaper in Tennessee |
| Power tools | $623 | $634 | $11 cheaper in Tennessee |
| Suit | $623 | $634 | $11 cheaper in Tennessee |
| School uniform | $561 | $571 | $9.92 cheaper in Tennessee |
| Storage unit | $185 | $194 | $9.68 cheaper in Tennessee |
| Vacuum cleaner | $545 | $555 | $9.64 cheaper in Tennessee |
| Cookware | $467 | $476 | $8.27 cheaper in Tennessee |
| Running shoes | $405 | $412 | $7.17 cheaper in Tennessee |
| Luggage | $390 | $396 | $6.89 cheaper in Tennessee |
| Work uniform | $343 | $349 | $6.07 cheaper in Tennessee |
| Winter coat | $312 | $317 | $5.52 cheaper in Tennessee |
| Cannabis (legal states) | $101 | $106 | $5.26 cheaper in Tennessee |
| Internet service | $100 | $105 | $5.20 cheaper in Tennessee |
| School supplies | $280 | $285 | $4.96 cheaper in Tennessee |
| Concert ticket | $213 | $217 | $4.65 cheaper in Tennessee |
| Gas fill-up | $64 | $67 | $3.35 cheaper in Tennessee |
| Clothing | $187 | $190 | $3.32 cheaper in Tennessee |
| Haircut | $60 | $63 | $3.12 cheaper in Tennessee |
| Restaurant dinner | $150 | $152 | $2.65 cheaper in Tennessee |
| Costume | $140 | $143 | $2.48 cheaper in Tennessee |
| Swimwear | $132 | $135 | $2.35 cheaper in Tennessee |
| Prescription refill | $43 | $45 | $2.23 cheaper in Tennessee |
| Food delivery | $55 | $57 | $1.68 cheaper in Tennessee |
| Pet food | $94 | $95 | $1.64 cheaper in Tennessee |
| Rideshare trip | $31 | $33 | $1.64 cheaper in Tennessee |
| Pizza delivery | $58 | $59 | $1.52 cheaper in Tennessee |
| Baby clothes | $86 | $87 | $1.51 cheaper in Tennessee |
| Sunscreen | $86 | $87 | $1.51 cheaper in Tennessee |
| First aid supplies | $70 | $71 | $1.23 cheaper in Tennessee |
| Gym membership | $70 | $71 | $1.23 cheaper in Tennessee |
| Streaming bundle | $70 | $71 | $1.23 cheaper in Tennessee |
| Dry cleaning | $62 | $63 | $1.11 cheaper in Tennessee |
| Toiletries | $62 | $63 | $1.11 cheaper in Tennessee |
| Vitamins and supplements | $55 | $55 | $0.97 cheaper in Tennessee |
| Cinema ticket | $46 | $47 | $0.91 cheaper in Tennessee |
| Deli sandwich | $51 | $52 | $0.90 cheaper in Tennessee |
| Meal kit | $360 | $359 | $0.86 cheaper in Kentucky |
| Books | $47 | $48 | $0.82 cheaper in Tennessee |
| Soft drinks | $37 | $38 | $0.65 cheaper in Tennessee |
| Weekly groceries | $262 | $262 | $0.63 cheaper in Kentucky |
| Birthday cake | $180 | $180 | $0.45 cheaper in Kentucky |
| Grocery delivery | $212 | $212 | $0.41 cheaper in Tennessee |
| Over-the-counter medicine | $23 | $24 | $0.40 cheaper in Tennessee |
| Energy drinks | $22 | $22 | $0.38 cheaper in Tennessee |
| Candy | $19 | $19 | $0.35 cheaper in Tennessee |
| Fast food meal | $19 | $19 | $0.35 cheaper in Tennessee |
| Bar drink | $17 | $17 | $0.32 cheaper in Tennessee |
| Cigarettes or vape | $14 | $14 | $0.26 cheaper in Tennessee |
| Baby formula | $67 | $67 | $0.15 cheaper in Kentucky |
| Frozen meals | $33 | $33 | $0.09 cheaper in Kentucky |
| Coffee beans | $36 | $36 | $0.08 cheaper in Kentucky |
| Bread and bakery | $21 | $21 | $0.06 cheaper in Kentucky |
| Snack food | $18 | $18 | $0.05 cheaper in Kentucky |
| Bottled juice | $14 | $13 | $0.04 cheaper in Kentucky |
| Bottled water | $15 | $15 | $0.04 cheaper in Kentucky |
Across the 91 things we can price in both states, Tennessee comes out cheaper more often. That is not the whole story. Housing, wages and property tax move far more than sales tax does, and none of them are in these numbers. See limitations.
Across the 91 categories computable in both states, Tennessee is cheaper more often. ⚠️ This compares tax treatment alone: housing costs, prevailing wages and property tax vary far more between states than sales tax does, and none of them enter these figures. See limitations.
Questions people ask
One of these has no income tax — is it simply the cheaper one?
Not on its own. A state without an income tax has to raise the money somewhere else, so the comparison only means something once sales and property are counted too. The pair here differs by about 3.61% on the sales side, which is where a good deal of that difference reappears.
Which of these is actually cheaper?
There is no single answer for this pair. One state leans on income and the other on spending, separated by about 3.61% at the register, so the ranking flips depending on the household.
How much would moving between these two actually change?
Enough to be worth calculating rather than guessing. The gap between these two is wide on at least one levy, so the answer depends on your own income and spending rather than on a general rule — which is what the calculator above is for.
Does the absence of an income tax make this the lower-burden state?
One state levies no personal income tax on wages and the other does. Revenue substitution means the comparison is only meaningful across all three bases: the combined sales rate differs by about 3.61%, and property tax is levied independently. ⚠️ Relative burden depends on a household's income, consumption and property mix, and reverses across that range for many pairs.
Why do the two levies rank these states differently?
The income and consumption levies rank these states in opposite directions, with a about 3.61% sales differential offsetting the income differential. Relative burden is therefore a function of the household's consumption share of income; no ordering holds across the full range, and single-figure comparisons implicitly assume one.
How material is this differential?
At least one levy differs materially between these states. Aggregate effect is income- and consumption-dependent and should be computed for the specific household rather than inferred from headline rates; the ordering can still reverse once property tax is included.