Modest Money Maps

The No-Income-Tax Trap

No income tax doesn't mean cheapest.

Florida and Tennessee both tax wages at 0%. Put the same household in all three states and the all-in burden — income, sales, property, and insurance — tells a different story.

Your household

Do you own or rent?

Same household, all 3 states

The headline lies. Florida costs $5,226/yr more than Tennessee.

Florida's 0% income tax looks like the win, but the all-in burden is $5,226/yr higher than Tennessee. Insurance erases the tax advantage.

  1. #1 Tennessee $8,277 cheapest all-in
  2. #2 Alabama $11,801
  3. #3 Florida $13,503 the 0% trap

What this means

Insurance is the softest line — statewide averages, not your quote. Property and sales tax are firmer.

Show the line-by-line breakdown
Line itemTennesseeAlabamaFlorida
Income tax$0$3,083$0
Sales tax paid$2,380$2,409$1,435
Property tax$1,470$1,080$2,370
Home + auto insurance$4,427$5,229$9,698
All-in burden$8,277$11,801$13,503
How we calculated this

Each state gets the same household. Income tax is applied to your wages (Florida and Tennessee are 0%; Alabama uses its married brackets). Sales tax is your spending basket times each state's combined rate, with groceries taxed separately. Property tax is each state's effective owner-occupied rate times your home value. Insurance uses statewide averages. We add them up and rank the states by total annual burden — cheapest first.

See the sources

Source

Tax Foundation — combined sales tax

What it covers
Average combined state+local sales-tax rates. TN ordinary ceiling ~9.75%, not 10.11%.
Publisher
Tax Foundation
Last checked
2026-06-23
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Source

Tax Foundation — property tax

What it covers
Effective owner-occupied property-tax rates applied to a constant $300k home.
Publisher
Tax Foundation
Last checked
2026-06-23
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Source

Alabama DOR — income tax

What it covers
AL wage income tax estimate (MFJ, std deduction, federal-tax deduction). Estimate tier.
Publisher
Alabama Department of Revenue
Last checked
2026-06-23
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Source

Tennessee DOR — Hall tax repealed

What it covers
Hall income tax repealed for tax years beginning Jan 1, 2021 or later.
Publisher
Tennessee Department of Revenue
Last checked
2026-06-23
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Rough estimate

Bankrate/III — insurance averages

What it covers
Statewide-average home+auto premiums. Quotes vary sharply by ZIP, roof, credit, vehicle.
Publisher
Bankrate / Insurance Information Institute
Last checked
2026-06-23
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Rough estimate

BLS CES — spending basket

What it covers
~$75k household proxy: $20,500 general taxable + $6,400 groceries. Model, not a receipt.
Publisher
U.S. Bureau of Labor Statistics
Last checked
2026-06-23
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Assumptions & weak links
  • Insurance is the softest line — statewide averages, not your quote. It swings hardest by ZIP, roof age, and credit.
  • Sales tax is modeled from a spending basket, not a receipt audit.
  • Alabama income tax is an estimate; it's sensitive to deductions and dependents.
  • Home value is held constant across states to isolate the tax machines, not housing markets.
  • This is a tax-and-insurance burden comparison, not a full budget or relocation plan.