Tennessee wins decisively on income tax — its 0% rate saves $6,400/year on $100,000 income compared to South Carolina’s 6.4%. For retirees, both states are competitive: SC offers a $15,000 retirement income deduction for residents 65+, but Tennessee’s zero income tax means all retirement income is completely untaxed. South Carolina strikes back on property tax (0.57% vs Tennessee’s 0.71%) and sales tax (up to 9% vs Tennessee’s 9.55% average — tied for highest in the US). For working earners, Tennessee is a clear winner; for retirees in lower income brackets or those valuing lower property and sales taxes, South Carolina has legitimate appeal.

By Daniel, Founder of CountryTaxCalc

Daniel has spent 5+ years researching tax systems across 95+ countries and all US states to make tax comparison accessible to everyone. For corrections, contact us.

Last Updated: April 2026

The Big Picture

🌴 South Carolina

6.4%

Flat (reducing to 6%)

Flat 6.4% income tax (target 6% by end of 2026 phase-down); 6% state sales tax; very low property ~0.57%

🎸 Tennessee

0%

No Income Tax

Zero income tax since Hall Tax repeal in 2021; 7% state sales tax with highest combined rate in US ~9.55%

Typical Annual Savings

At $100,000 income:

$6,400

That is $533/month back in your pocket!

Tax Savings by Income Level

IncomeSC TaxTN TaxSavings10-Year
$50,000 $3,200$0$3,200$32,000
$75,000 $4,800$0$4,800$48,000
$100,000 $6,400$0$6,400$64,000
$150,000 $9,600$0$9,600$96,000
$250,000 $16,000$0$16,000$160,000
$500,000 $32,000$0$32,000$320,000
💡

CountryTaxCalc.com is reader-supported. When you use our partner links, we may earn a commission at no cost to you. This helps us provide free tax calculators and comparison tools. Learn more about our affiliate partnerships

Talk to a Real CPA

TaxHub

★ 4.8 verified reviews  ·  3,758 reviews

Moving between South Carolina and Tennessee? Partial-year residency, domicile changes, and South Carolina’s rate phase-down require expert handling. TaxHub connects you with licensed CPAs who specialise in state tax moves.

⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.

Talk to a CPA About Your State Move →

South Carolina Pros and Cons

✅ Pros

  • Lowest property tax in the Southeast: South Carolina’s effective rate of ~0.57% is among the lowest in the US — on a $350,000 home, approximately $990/year less than Tennessee’s 0.71% rate
  • Lower sales tax than Tennessee: SC charges 6% state + up to 3% local (capped at 9% combined in most counties) vs Tennessee’s average of 9.55% combined — tied for highest in the US; SC saves $275–$550/year on typical spending
  • Retirement income deduction: South Carolina residents 65+ can deduct up to $15,000 of retirement income from state taxable income — reducing the income tax burden significantly for older residents on modest retirement income
  • Coastal lifestyle at lower cost: Myrtle Beach and Hilton Head offer Atlantic coastline living at a fraction of Florida prices; Charleston consistently ranked among best US cities for quality of life

❌ Cons

  • 6.4% flat income tax: South Carolina’s income tax costs $6,400/year on $100,000, $16,000 on $250,000 — compared to $0 in Tennessee; for working-age earners this is the dominant tax disadvantage
  • Rate phase-down is slow: SC is reducing its top rate toward 6% but the timeline extends through 2026 and beyond; even at 6%, South Carolina’s income tax remains higher than neighboring Tennessee and Georgia
  • Hurricane and flood risk: South Carolina’s coastal areas face significant hurricane and flooding risk, driving high homeowner insurance premiums that offset the property tax advantage
  • Smaller job market than Tennessee: Nashville and Memphis combined offer a considerably larger and more diverse employment market than Columbia, Charleston, or Greenville individually

Tennessee Pros and Cons

✅ Pros

  • Zero income tax: Tennessee’s complete absence of income tax saves $6,400/year on $100,000 income, $32,000/year on $500,000 — the dominant financial reason to choose Tennessee over South Carolina
  • All retirement income fully untaxed: Social Security, pensions, 401(k) withdrawals, IRA distributions — all completely exempt in Tennessee; there is no state income tax to apply; stronger than SC’s partial deduction
  • Nashville economic powerhouse: Nashville is one of America’s fastest-growing metros — healthcare (HCA Healthcare, Vanderbilt), tech, music industry, and corporate relocations driving exceptional career growth
  • No estate or inheritance tax: Tennessee has no estate tax and no inheritance tax; South Carolina also has no estate tax; neither state penalises wealth transfer

❌ Cons

  • Highest combined sales tax in the US: Tennessee averages 9.55% combined sales tax — tied for highest nationally; grocery items are taxed at 4% state (most states exempt food); high-spending households pay significantly more than in SC
  • Higher property tax: Tennessee’s effective rate ~0.71% is above South Carolina’s ~0.57%; on a $350,000 home, approximately $490/year more; modestly offsets the income tax advantage for homeowners
  • Nashville housing costs: Nashville median home price has surged past $450,000 — significantly higher than most South Carolina markets; income tax savings can be eroded by higher mortgage costs
  • Tornado risk: Middle Tennessee sits in a tornado corridor with meaningful severe weather risk; while Carolinas face hurricanes, inland Tennessee tornado exposure is a quality-of-life consideration

Frequently Asked Questions

Q: How much does moving from South Carolina to Tennessee save in taxes?

On $100,000 income, moving from South Carolina to Tennessee saves $6,400/year in income tax (SC 6.4% vs TN 0%). However, Tennessee has slightly higher property tax (0.71% vs SC 0.57%) and higher sales tax (9.55% average vs SC up to 9%). On a $350,000 home, property tax difference is approximately $490/year more in TN. Accounting for higher sales tax on $40,000 annual spending, Tennessee residents pay approximately $220 more per year in sales tax. Net annual savings moving SC to TN at $100,000 income: approximately $5,690/year. Over 10 years: $56,900.

Q: Is South Carolina good for retirement compared to Tennessee?

Both states are excellent for retirement, with different strengths. Tennessee has zero income tax, meaning all retirement income (Social Security, pensions, IRA withdrawals) is completely untaxed regardless of amount. South Carolina offers a $15,000 retirement income deduction for residents 65+ and has lower property taxes (0.57% vs TN 0.71%) and lower sales tax. For retirees with modest retirement income under $50,000: South Carolina’s deduction reduces the income tax disadvantage significantly. For affluent retirees with high retirement income: Tennessee’s zero tax rate is substantially better. Tennessee also has lower property taxes than SC’s already-low rate for retirees in high-value homes.

Q: Why does Tennessee have such high sales tax?

Tennessee relies on sales tax as a primary revenue source precisely because it has no income tax. The state 7% rate plus local county/city taxes averaging 2.55% produce the 9.55% average combined rate — tied for highest in the US. Tennessee taxes groceries at 4% (most states exempt food completely). This means lower and middle-income residents pay a higher share of income in sales tax compared to higher earners. Tennessee’s zero income tax is regressive overall — it benefits high earners disproportionately while the high sales tax burdens lower earners relatively more.

Q: Nashville vs Charleston — which city is better for finances?

Nashville wins on income tax savings ($6,400+/year at $100K), larger job market, and higher average salaries. Charleston wins on property tax (SC 0.57% vs TN 0.71%), lower sales tax, coastal lifestyle, and significantly lower housing costs (Charleston median ~$400K vs Nashville ~$450K+). For career-focused workers in healthcare, tech, or finance: Nashville’s larger economy and zero income tax create compelling long-term wealth-building advantages. For those prioritising lifestyle, coastal access, or retirement: Charleston’s lower total cost of living and South Carolina’s retirement deduction make it the more nuanced choice.

Related Comparisons

Alabama vs TennesseeArkansas vs TennesseeSouth Carolina vs FloridaSouth Carolina Tax CalculatorTennessee Tax Calculator