Illinois vs Tennessee

Key Points: Illinois vs Tennessee 2026

• State income tax: Illinois 4.95% flat on all wages; Tennessee 0% on wages (Hall tax on investment income fully phased out)
• Property tax: Illinois among the highest effective rates in the US; Tennessee effective owner-occupied rate approximately 0.48% (Tax Foundation)
• Sales tax: Tennessee combined state and local average approximately 9.61% (near top nationally); Illinois 6.25% state plus local add-ons (lower overall than Tennessee)
• Cost of living index: Tennessee 90.3; Illinois 94.7; US national average 103.4 (World Population Review 2026)
• Median home value (ZHVI): Illinois approximately $282,573 statewide; Tennessee approximately $330,018 statewide; Nashville metro approximately $437,000
• Job growth: Tennessee 3.2% year-over-year (6th in the nation); Illinois 2.4% year-over-year (BLS / World Population Review 2026)
• Typical wages: Tennessee residents earn approximately 15% less than Illinois residents on average
• Migration trend: Illinois is a consistent net outbound state; Tennessee is a consistent net inbound state; United Van Lines and U-Haul data confirm this pattern every year since 2019
• Climate: Illinois winters are colder with significant lake-effect snow in the Chicago corridor; Tennessee summers are hotter and more humid; Tennessee has higher annual rainfall (approximately 50 inches vs. 38 in Chicago)
• Best for tax-conscious households: Tennessee
• Best for career depth and major-market access: Illinois (Chicago)

Illinois vs. Tennessee: Side-by-Side Snapshot

Choosing between the Midwest and the South often comes down to a trade-off between established urban infrastructure and aggressive tax savings. In 2026, Coastal Moving Services data shows a surge in relocations from Chicago to Nashville, driven primarily by Tennessee’s lack of state income tax and milder winters. Below is the updated side-by-side comparison of the key metrics influencing these moves.

Taxes: Where the Real Financial Difference Lives

The tax comparison between Illinois and Tennessee is the single most financially consequential dimension of this comparison for the majority of people evaluating a move between the two states, and it deserves more precision than a simple summary of which state has lower taxes overall. The honest answer depends on your income, your home value, and your annual retail spending, and those three variables can produce meaningfully different outcomes for different households.

State Income Tax

Illinois taxes all wage income at a flat 4.95 percent. There is no deduction, no bracket, and no exemption for income level. A household earning $80,000 pays $3,960 per year in Illinois state income tax. A household earning $200,000 pays $9,900 per year. Tennessee collects zero percent on wage income. The Hall Tax on investment income and dividends that existed in Tennessee for decades was fully phased out, and Tennessee residents now have no state income tax liability on wages, salaries, or self-employment income whatsoever. For a $200,000 household, the difference between Illinois and Tennessee income tax alone is $9,900 per year, or $825 per month in take-home pay. YouTube financial analysis from January 2026 shows that families earning in the $150,000 to $300,000 range moving from the Chicago area to Williamson County, Tennessee can see total annual savings of $15,000 to $40,000 when income tax, property tax, and cost of living differences are stacked together.

Property Tax

Property tax is where the Illinois financial picture becomes most severe for homeowners. Illinois carries an effective property tax rate of approximately 2.08 percent on owner-occupied homes, ranking it consistently among the top two or three highest in the country alongside New Jersey and Connecticut. On a $300,000 home in the Chicago suburbs, that translates to approximately $6,240 per year in property taxes, or $520 per month added to every homeowner’s effective housing cost. Tennessee’s effective owner-occupied property tax rate is approximately 0.48 percent per Tax Foundation data. On the same $300,000 home, Tennessee property taxes run approximately $1,440 per year, or $120 per month. The annual difference on a $300,000 home is $4,800 per year in favor of Tennessee. On a $500,000 home, that difference reaches $8,000 per year.

Sales Tax

Tennessee partially offsets its income and property tax advantages through the highest average combined sales tax in the country at approximately 9.61 percent. Illinois’ combined state and local average runs approximately 8.80 percent. The difference of roughly 0.81 percentage points means a household spending $40,000 per year on taxable retail purchases pays approximately $324 more per year in sales taxes in Tennessee than in Illinois. That sales tax gap does not come close to offsetting the income tax and property tax savings for most households, but it is a real line item that consumers who spend heavily on discretionary retail feel meaningfully. Groceries are taxable in Tennessee at 4 percent, which adds a persistent cost that Illinois residents, who pay no state grocery tax, do not face.

Illinois vs. Tennessee: Side-by-Side Snapshot

Many of our clients moving from the Midwest to the South cite “tax relief” as their primary motivator. While Illinois offers a robust urban infrastructure, Tennessee has become a top destination for those looking to maximize their take-home pay. Based on the latest 2026 market data, here is how the two states compare across the most critical cost-of-living categories.

When property tax savings on a $350,000 home are added (approximately $5,600 per year in favor of Tennessee), the combined annual tax savings for a household earning $120,000 and owning a $350,000 home reaches approximately $11,540 per year. Over 10 years with no home value appreciation, that is $115,400 in retained household wealth that Illinois collects and Tennessee does not.

Housing Costs

Housing is one of the few categories where Illinois outperforms Tennessee on pure sticker price at the statewide level, though the picture reverses when property taxes are factored into the total monthly ownership cost. Illinois’ statewide Zillow Home Value Index (ZHVI) runs approximately $282,573 compared to Tennessee’s $330,018. At first glance, Illinois homes are cheaper. But a $282,573 Illinois home carrying a 2.08 percent effective property tax rate costs approximately $490 per month in property taxes alone. The same money spent on a $330,018 Tennessee home at the 0.48 percent effective rate costs approximately $132 per month in property taxes. The Tennessee home is $47,000 more expensive to purchase and $358 cheaper per month to own after factoring in property tax alone, and in roughly 11 years the cumulative property tax savings exceed the purchase price difference.

Metro Housing Markets

The metro-level comparison shifts the sticker price picture further. Nashville’s typical home value sits at approximately $437,000, well above the Chicago area’s wide pricing range. Nashville has seen significant appreciation since 2020 and remains one of the more expensive Sun Belt metros to enter as a first-time buyer. Knoxville and Chattanooga offer meaningfully lower entry points than Nashville, with Knoxville metro homes averaging in the $290,000 to $320,000 range and Chattanooga in the $280,000 to $310,000 range. Chicago’s citywide pricing spans an enormous range from under $200,000 in outer neighborhoods to $500,000 and above in Lincoln Park, Wicker Park, and Lakeview. Chicago suburban markets in the collar counties (DuPage, Kane, Will, Lake) typically range from $280,000 to $500,000 with the highest property tax burdens in the state.

Housing and Property Tax Comparison

When comparing housing costs between Illinois and Tennessee, the sticker price of the home only tells half the story. While Tennessee’s median home values have risen due to high demand, the “hidden” cost of homeownership—property taxes—remains significantly lower than in the Midwest. In many cases, a more expensive home in Nashville can result in a lower monthly mortgage payment than a more affordable home in the Chicago suburbs, simply due to the tax differential.

Jobs and Economy

Illinois and Tennessee have structurally different economies, and the “better” job market depends entirely on your industry and career stage. Illinois has a larger economy and a deeper professional services sector, anchored by Chicago’s status as the third-largest city in the United States and one of the top five financial and logistics hubs in the world. Finance, consulting, healthcare, advanced manufacturing, technology, and logistics all maintain major Chicago presences. The Chicago O’Hare corridor gives Illinois-based workers direct flight access to virtually every major US and international business destination, which matters for careers that require regular travel. The tradeoff is that Illinois’ high tax environment has driven several corporate headquarters relocations to lower-tax Sun Belt states in recent years, a trend that shows no sign of reversing.

Tennessee’s economy is growing faster than Illinois’ by every available measure. At 3.2 percent year-over-year job growth, Tennessee ranked sixth in the nation compared to Illinois’ 2.4 percent. Tennessee added 103,300 jobs in the most recent 12-month BLS reporting period; Illinois added 144,900 jobs from a base that is nearly twice as large. The industries driving Tennessee’s growth include healthcare (Vanderbilt University Medical Center, HCA Healthcare, and Community Health Systems are all headquartered in Nashville), automotive manufacturing (Ford’s BlueOval City in Stanton and Volkswagen’s Chattanooga plant), logistics (Memphis is the FedEx global hub and one of the busiest freight airports in the world), and entertainment and media (Nashville’s music and entertainment economy supports a growing broader creative industry). The consistent weakness in Tennessee’s job market relative to Illinois is salary level. Average wages in Tennessee run approximately 15 percent below Illinois averages, which partially offsets the income tax and property tax savings for moderate-income earners and makes the net financial comparison more nuanced than the headline tax numbers suggest.

Job Market and Economic Performance

The economic profiles of Illinois and Tennessee offer a study in contrast between a massive, established economy and a rapidly accelerating one. While Illinois maintains a higher total number of jobs and higher average wages, Tennessee’s growth trajectory is among the most aggressive in the nation. For professionals relocating in 2026, the decision often balances the established corporate landscape of Chicago against the burgeoning tech and manufacturing hubs of Nashville and the “Volunteer State.”

Cost of Living

Tennessee’s cost of living index of 90.3 sits 4.4 points below Illinois’ 94.7, and both sit below the US national average of 103.4. In practical terms, a household spending $60,000 per year on living expenses in Illinois would spend approximately $57,300 for an equivalent standard of living in Tennessee, a savings of approximately $2,700 per year before any tax advantage is counted. That gap is real but not dramatic on its own. Combined with the income tax and property tax differentials, however, it amplifies the financial case for Tennessee substantially. The day-to-day categories where Tennessee shows the most advantage are housing, transportation, and utilities. Healthcare costs are comparable between the two states. Groceries in Tennessee are slightly more expensive when the 4 percent state grocery tax is included.

Cost of Living by Category

While the “Overall Index” gives Tennessee a slight advantage, the true cost of living depends heavily on your lifestyle and location. Illinois maintains a “tax-friendly” edge on everyday consumables like groceries and retail goods, whereas Tennessee offers massive structural savings on income and property. For those relocating in 2026, the primary “win” in Tennessee is found in housing carrying costs and take-home pay, while Illinois often wins on transit efficiency and summer utility stability.

Climate

Climate is one of the most commonly cited motivations for Illinois-to-Tennessee moves, and the difference is substantial and real. Chicago’s January averages a high of 32 degrees Fahrenheit and a low of 19 degrees Fahrenheit, with lake-effect snow adding significant precipitation totals to the northern portion of the state. The broader Illinois winter runs from November through March with meaningful freeze risk and heating costs that increase utility bills substantially over the five-month cold season. Nashville averages meaningfully milder winter conditions. January highs in Nashville average 48 degrees Fahrenheit, snow events are sporadic rather than sustained, and the freeze season is shorter and less severe. For families relocating with children or for anyone who has spent years commuting through Chicago winters, the Tennessee climate is a genuine quality-of-life upgrade from October through April.

The summer tradeoff requires honest acknowledgment. Tennessee summers are hotter and more humid than Chicago summers. Nashville averages a July high of 90 degrees Fahrenheit with a heat index that regularly pushes into the mid-to-upper 90s. Summer air conditioning in Tennessee runs longer and costs more than in Illinois. Tennessee’s annual rainfall of approximately 50 inches exceeds Chicago’s 38 inches, and Tennessee has more thunderstorm activity. Severe weather risk in Tennessee includes tornadoes, which occur primarily in the western and middle portions of the state. The net climate verdict for most Illinois movers evaluating Tennessee is that the trade of harsh winters for hot, humid summers represents a favorable tradeoff for lifestyle purposes, but the summer AC cost difference is real and should be budgeted for.

Statewide Climate Comparison

Comparing Illinois and Tennessee on a statewide level reveals a significant “latitudinal shift.” Illinois stretches nearly 400 miles from north to south, meaning northern residents face heavy Great Lakes winters while southern residents experience a climate closer to Kentucky. Tennessee, conversely, is defined more by its elevation—with the rainy, humid lowlands of the West and Middle regions contrasting against the cooler, temperate Appalachian East.

Education

The education comparison between Illinois and Tennessee is more competitive than the popular perception suggests, and both states require the same homework from families: ignore statewide averages and evaluate the specific school district and attendance zone for any address you are considering. At the statewide NAEP level, Illinois’ grade 8 math proficiency runs approximately 32 percent, with average scale scores above the national average in multiple subject and grade combinations. Tennessee has posted notably strong improvement from 2022 through 2024, with gains in grade 4 math and grade 8 reading that represent some of the strongest growth trajectories of any state in the country. Both states hover near national average proficiency levels overall, and neither has a clear system-wide advantage over the other.

The most important practical distinction for families comparing specific moves is not which state performs better statewide but which specific districts are available at your target address. Tennessee has several school districts that consistently rank among the top in the South: Williamson County Schools (Franklin, Brentwood), Knox County Schools (Knoxville), and Hamilton County Schools (Chattanooga) all earn strong Niche ratings and offer AP, IB, and dual enrollment programs comparable to Illinois’ better suburban districts. Illinois’ strongest districts are concentrated in the Chicago northern suburbs: New Trier Township, Naperville Community Unit District 203, and Barrington 220 are nationally recognized. If a family relocating from the top-rated Chicago suburb districts to Nashville is choosing between Williamson County and Metro Nashville Public Schools, the comparison is not neutral and requires specific enrollment zone verification before any conclusions can be drawn.

Quality of Life and Culture

Illinois’ quality-of-life advantage over Tennessee is primarily concentrated in Chicago and its immediate suburbs, which offer a genuine world-class urban experience that no Tennessee city currently replicates at the same scale. The Art Institute of Chicago, the Chicago Symphony Orchestra, the Museum of Science and Industry, Millennium Park, 26 miles of Lake Michigan lakefront, a transit system (the CTA) that operates 24 hours in Chicago, and a dining ecosystem with more Michelin-starred restaurants than any city outside New York and Los Angeles give Chicago-area residents a density of cultural amenity that is objectively unmatched in Tennessee. Chicago also maintains deep professional sports infrastructure across the NFL, NBA, MLB (two teams), NHL, and MLS. For households that use and value urban cultural amenities regularly, the Chicago metro is a difficult quality-of-life match to replicate in a lower-cost market.

Tennessee’s quality-of-life proposition is different in kind rather than lesser in overall value for the majority of households. Nashville is one of the fastest-growing cultural cities in the country and has invested heavily in arts, dining, professional sports (NFL Titans, NHL Predators), and nightlife infrastructure since 2015. The Gulch, East Nashville, 12 South, and Germantown neighborhoods offer restaurant and creative scenes that genuinely compete with mid-tier Chicago neighborhoods on quality if not on depth. Tennessee’s outdoor recreation access is the category where it holds a significant and unconditional advantage: Great Smoky Mountains National Park (the most visited national park in the US), Cumberland Gap, Natchez Trace Parkway, and the state’s extensive river and lake systems for fishing, kayaking, and boating give Tennessee residents outdoor access that landlocked Illinois metro residents simply do not have. For families who prioritize hiking, camping, water sports, and year-round outdoor activity, Tennessee offers something Illinois cannot meaningfully match.

Best Cities to Consider in Each State

Choosing where to land in Tennessee often depends on which “Illinois lifestyle” you are trying to replicate—or escape. For those accustomed to the top-tier amenities of Naperville or Hinsdale, Williamson County suburbs like Brentwood and Franklin offer a familiar high-end feel with superior schools. Meanwhile, cities like Knoxville and Chattanooga appeal to those seeking the outdoor recreation and affordability that is often harder to find in the Midwest. Below is the 2026 market snapshot for the most popular destination cities.

Top Cities in Illinois (If Staying Makes Financial Sense)

For many, the decision to stay in Illinois is driven by access to world-class transit, elite public school districts, and a high-density job market that Tennessee is still racing to match. While property taxes in the “Prairie State” are a significant hurdle, the trade-off is often found in higher average salaries and robust community infrastructure. In 2026, these areas remain the top picks for families and professionals who prioritize proximity to Chicago’s economic engine or the academic stability of downstate university hubs.

Who Should Move to Tennessee and Who Should Stay in Illinois

Move to Tennessee if you:

• Earn $80,000 or more per year and own or plan to buy a home. The combined income tax and property tax savings reach five figures annually at this income and ownership level and compound over time into substantial household wealth.
• Work remotely or in healthcare, logistics, automotive manufacturing, or entertainment. All four sectors are growing faster in Tennessee than in Illinois.
• Are relocating to the Chicago suburbs primarily for school quality. Williamson County Schools (Franklin and Brentwood) offer A+ school quality comparable to Naperville and Barrington at a significantly lower total tax cost.
• Want warmer winters and outdoor recreation access. Tennessee’s winter climate is meaningfully milder and the Smoky Mountains give families year-round outdoor infrastructure that Illinois cannot provide.
• Are in or approaching retirement. No income tax on wages, low property taxes, and a warm climate create favorable retirement economics relative to Illinois.

Stay in Illinois (or move to Illinois) if you:

• Work in finance, consulting, global logistics, or a corporate headquarters role that requires Chicago physical presence. Tennessee’s job market does not currently replicate the depth of the Chicago professional services corridor.
• Rely on urban transit. Chicago’s CTA is one of the few transit systems in the US where car-free living is genuinely practical. Tennessee is car-dependent statewide with no comparable transit infrastructure.
• Have children entering elite college-prep programs in the top-ranked Illinois suburban districts (New Trier, Naperville 203, Barrington 220) with specific AP and IB program access not yet matched in Tennessee.
• Prioritize world-class arts, museums, professional sports access, and urban cultural amenities at the level Chicago provides. Tennessee cities are improving rapidly but have not reached Chicago’s depth of cultural infrastructure.
• Earn under $50,000 per year with low retail spending and no home ownership. At lower income levels without the property tax differential, the Tennessee financial advantage narrows and the Illinois job market’s wage premium partially compensates for the income tax cost.

FAQ

Is Tennessee cheaper to live in than Illinois?

On a cost of living index basis, yes. Tennessee scores 90.3 versus Illinois’ 94.7 on the World Population Review 2026 index, both below the US national average of 103.4. More importantly for most households, Tennessee has no state income tax on wages compared to Illinois’ flat 4.95 percent, and property taxes in Tennessee run approximately 0.48 percent effective rate compared to Illinois’ approximately 2.08 percent, which is the highest-impact financial difference between the two states. The only cost categories where Illinois runs cheaper than Tennessee are statewide home values (slightly lower in Illinois at $282,573 vs. $330,018) and grocery taxes (Illinois has none; Tennessee charges 4 percent). Tennessee’s combined sales tax of 9.61 percent is also higher than Illinois’ combined rate of approximately 8.80 percent.

How much can a family save by moving from Illinois to Tennessee?

For a household earning $120,000 per year and owning a $350,000 home, the combined annual savings in state income tax and property tax alone reaches approximately $11,540 per year. At $200,000 income and a $500,000 home, total tax savings exceed $17,900 per year. After factoring in Tennessee’s approximately 4.4 percent lower cost of living, total annual household savings for a typical dual-income professional family in the $150,000 to $300,000 earnings range run $15,000 to $40,000 per year. Financial analysis published in January 2026 on the Illinois-to-Tennessee relocation corridor shows that cumulative 10-year savings for upper-middle-income households can approach $200,000 to $400,000 when investment returns on retained income are included.

What are the downsides of moving from Illinois to Tennessee?

The most commonly cited downsides of moving from Illinois to Tennessee are: lower average wages (approximately 15 percent below Illinois levels), which partially offsets the income tax savings for moderate earners; a higher combined sales tax of 9.61 percent including a 4 percent grocery tax Illinois does not charge; a car-dependent lifestyle statewide with no transit comparable to Chicago’s CTA; hotter and more humid summers with higher air conditioning costs; and a cultural and entertainment infrastructure that, outside Nashville, does not match Chicago’s depth. Healthcare quality is comparable in Nashville and Knoxville, but more rural Tennessee counties have limited specialist access that Chicago-area residents may find surprising.

What is the most popular area in Tennessee for Illinois movers?

The Nashville metro, specifically Williamson County (Franklin and Brentwood), is the most popular destination for Illinois movers seeking a direct upgrade from the Chicago northern suburbs model. Williamson County Schools earn A+ ratings from Niche, the community character is specifically described by residents as the closest Tennessee equivalent to Naperville or Barrington, and the absence of state income tax combined with low property taxes produces immediate and substantial household financial gains relative to the Chicago suburb tax structure. The Knoxville metro is increasingly popular with remote workers and retirees who want lower prices than Nashville while retaining strong school quality and outdoor recreation access.

What is the average cost to move from Illinois to Tennessee in 2026?

A full-service interstate move from Illinois to Tennessee for a two- to three-bedroom household costs $3,200 to $6,500 on average in 2026, depending on the specific origin and destination cities, the volume of goods, the time of year, and the moving company selected. The driving distance from Chicago to Nashville is approximately 475 miles, putting it in the 400 to 500 mile cost tier where the average full-service move runs $2,703 to $3,500 per This Old House’s 2026 moving cost data. Adding full packing service increases the total by $800 to $1,200. A self-drive truck rental for the same move runs approximately $800 to $1,400 in truck and fuel costs. Moving off-peak (October through February, mid-week and mid-month) saves 15 to 25 percent relative to summer weekend rates.

References

1. World Population Review: Cost of Living Index by State 2026
2. World Population Review: Job Growth by State 2026
3. Rent.com: Living in Illinois vs Tennessee (December 2024)
4. Great Guys Move: Moving from Illinois to Tennessee (2025)
5. BuyWithNik: Pros and Cons of Moving to Nashville 2026 (February 18, 2026) — Nashville job growth, no income tax, healthcare and tech sectors
6. iMoving: Moving to Tennessee in 2026
7. Bureau of Labor Statistics: Tennessee Economy at a Glance
8. Wallace Group TN: Illinois vs Tennessee Taxes