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Moving To Brentwood, TN, Moving To Franklin, TN, Moving To Spring Hill, TNPublished July 21, 2026
You're Calculating Your Tennessee Tax Savings Wrong — Here's the Real Number
If you are making around $300,000 a year in California and running the numbers on a potential Tennessee move, I can promise you the real figure is bigger than you think. And almost every family that sits down with us has already done this math in their head. They walk in with a number. And that number is almost always off.
Sometimes they underestimate the savings. Sometimes they talked themselves out of a move that would have changed their financial picture because they read one headline about sales tax and stopped there. Either way, they are not working with the full picture.
This is that full picture. The honest one, including the parts where Tennessee does not save you as much as you might expect, because those parts exist and you deserve to know them before you make a decision.
And just to be clear up front: I am Kyle Wallace. My wife Casey and I run Wallace Group right here in Franklin. We help families make this exact move from California every single week. We are not your CPA and nothing here is tax advice, but we have seen enough of these numbers, on enough of these conversations, to know where people get it wrong. That is what this post is about.
Watch the full breakdown on YouTube
Watch Full Video HereThe Three Tax Buckets You Have to Look at Together
The mistake most people make is looking at one number in isolation. They hear "zero income tax" and feel great. Or they hear "Tennessee has high sales tax" and feel nervous. The only way to actually calculate your savings is to run all three buckets at the same time: income tax, property tax, and sales tax. Here is what each one looks like.
Bucket 1 — Income Tax
California has the highest state income tax in the country. In 2026, the top rate is 13.3%. Most high earners are not at the very top, but if you are earning well, you are likely sitting in the 9.3% bracket that runs from about $72,000 a year all the way past $370,000. That is a big chunk of your income going to the state every single year. Tennessee's state income tax rate is zero. Not low. Not reduced. Zero. And since 2021, Tennessee does not tax investment income either. No tax on dividends, interest, retirement income, pensions, or Social Security. Whatever you are pulling in, the state of Tennessee is not taking a cut of it.
~$25,000
What a $300K/year California household commonly pays in state income + disability tax annually — that's $250K over a decade.
Bucket 2 — Property Tax
This is where Williamson County surprises people in a good way. Franklin, Brentwood, and College Grove are some of the most sought-after real estate in the entire state, and yet the property tax rate here is one of the lowest in Tennessee. The effective rate lands right around half a percent of your home's value. On a $1.5 million home, you are often looking at a property tax bill in the $8,000 range. And the tax assessment value here is typically about 25% below actual market value, which means that $8,000 bill is realistically on what is closer to a $2 million home in market terms. In California, a fresh purchase at a comparable price, taxed at the rate the county resets to when you buy, commonly runs several thousand dollars more per year. Income tax and property tax both lean clearly toward Tennessee.
Bucket 3 — Sales Tax
Here is the honest trade-off. Tennessee has no income tax, but it does have one of the higher sales tax rates in the country. Here in Williamson County, you are looking at 9.75% on most purchases. Tennessee does tax groceries at a reduced rate, but they are taxed. If your lifestyle runs heavy on spending, you will feel the sales tax more than you might expect. That is the real trade Tennessee makes: it does not reach into your paycheck, but it does meet you at the register.
Here is the math people miss, though. If you are earning a good living, that trade is wildly in your favor. You would have to spend an enormous amount of money on taxable goods every year for a couple of points of sales tax to come anywhere close to a five-figure income tax bill that just disappeared. For most of the families we work with, it is not even close. The income tax savings dwarf the sales tax difference.
The 3 Reasons People Get This Number Wrong
MISTAKE 1
They Only Look at One Bucket
Some people get excited about zero income tax and forget to account for the higher sales tax. Others read a scary headline about Tennessee's sales tax rate and talk themselves out of a move that would have saved them a fortune. You have to look at all three buckets together, income, property, and sales tax, not just whichever one is in front of you at the moment.
MISTAKE 2
They Underestimate What They're Currently Paying California
A couple of years back, California removed the cap on its state disability tax. It used to be that people making good money stopped paying it partway through the year once they hit the cap. That cap is gone. Now it comes out of every single dollar you earn, all year long. A lot of people are paying more to California right now than they realize, which means the savings here are bigger than they think too. If you have not recalculated your California tax burden recently, you should do that before you do anything else.
MISTAKE 3
They Do Not Establish Tennessee Residency Cleanly
This is the expensive one. California is famously aggressive about residency. If you move to Tennessee but keep a foot in California, whether that is the house, the business ties, or just the appearance that you did not really leave, California will come back and try to tax you anyway. Sometimes it happens years later. We have watched people lose significant chunks of their savings because they did the move half-heartedly. The difference between calculating your savings off the cuff and actually keeping them is in your timing, your sequence, and how cleanly you make the transition. This is not just about finding a house. It is about landing in Tennessee correctly so the savings you came here for actually sticks.
For the residency piece specifically, you want a real tax professional in your corner. We are happy to point you toward the one we use and the one a lot of our clients use.
Who This Move Actually Makes Sense For
If you are making good money, heading into retirement with real income coming in, or self-employed with a meaningful slice of your earnings disappearing to the state every April, this move can change your math in a serious way. We have watched families redirect what they were sending to California into the house they actually wanted, a college fund that was finally growing, and most importantly, more time.
If you are earning more modestly and spend heavily, the gap narrows. That is fine. You should just know that going in. We will always tell you straight. The families who get the most out of this move are the ones who go in with honest numbers, not just the headline.
Now, if you want to find out your actual numbers. We built a custom dedicated CA→TN Tax Savings Calculator.
Completely free to use: CA-TN Tax Savings Calculator
Frequently Asked Questions About Tennessee Tax Savings
How much does moving from California to Tennessee actually save you in taxes?
It depends on your income and how you earn it, but for a household making around $300,000 a year, the difference in state income and disability tax alone is often in the $25,000 per year range. Over a decade, that is a quarter of a million dollars. Property taxes in Williamson County also run lower than comparable California markets on similar home values. The one offset is a higher sales tax rate, but for most high-income households, the income tax savings are so substantial that the sales tax difference does not come close to closing the gap. The only way to get your exact number is to run your specific income, filing status, and spending through a real side-by-side comparison.
Does Tennessee really have zero state income tax?
Yes. Tennessee's state income tax rate on wages is zero. And since 2021, Tennessee also eliminated its tax on investment income, meaning dividends, interest, and capital gains are not taxed at the state level either. Retirement income, Social Security, and pension income are also untaxed by the state. This applies to every earner in Tennessee regardless of income level.
What is the property tax rate in Williamson County, TN?
The effective property tax rate in Williamson County is approximately 0.5% of your home's assessed value. Importantly, Tennessee assesses property at a value that is typically around 25% below actual market value, which means the effective rate against what you actually paid is even lower. A home in the $1.5 to $2 million range commonly carries a property tax bill in the $8,000 range annually, which is significantly lower than what you would pay on a comparable California purchase where the county reassesses to full purchase price when you buy.
What is the sales tax rate in Franklin and Williamson County, TN?
The combined state and local sales tax rate in Williamson County is 9.75% on most purchases. Tennessee does apply a reduced rate to groceries, but groceries are not fully exempt. Tennessee's sales tax is one of the higher rates in the country and is the primary tax trade-off you make in exchange for zero state income tax. For households spending heavily on taxable goods, this is worth factoring in, though for most high earners the income tax savings far exceed the incremental cost of the higher sales tax rate.
Can California tax you after you move to Tennessee?
Yes, and this happens more than people expect. California is one of the most aggressive states in the country when it comes to claiming continued tax jurisdiction over former residents. If you move to Tennessee but maintain a California address, keep a home there, retain significant business ties, or otherwise appear to have not fully severed your California residency, the state can and will pursue back taxes — sometimes years after the move. Establishing clean Tennessee residency from the beginning is critical to protecting your savings. Working with a tax professional who specializes in residency transitions is strongly recommended for anyone making this move.
Is moving from California to Tennessee worth it financially?
For high earners, the answer is usually yes by a significant margin. The combination of zero state income tax, low effective property tax rates in Williamson County, and a cost of living that is lower across most categories creates a financial picture that is genuinely difficult to replicate in California. The families who benefit the most are those making good incomes, those approaching retirement with meaningful income streams, and self-employed individuals whose state tax burden has been substantial. The families for whom the math is closer are those who earn more modestly and spend heavily on taxable goods. Either way, running your actual numbers before deciding is worth the hour it takes.
Want to Run Your Actual Numbers?
We walk families through this exact comparison every week. Tell us about your situation and roughly what you are looking to buy, and we will help you understand the move that actually works for you — not just the headline number.
Book a Free 15-Min CallCall or Text: 559-643-9255 | Email: casey@wallacegrouptn.com
Kyle and Casey Wallace
| Wallace Group TN
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