Tennessee Sales Tax Rate Is Highest In U.S.

[TMMT]

Tennessee Sales Tax Rate Is Highest In U.S.

WSMV Nashville, TN. ^ | 10/25/2009 | WSMV

Posted on October 25, 2009

Study: Tenn. Sales Tax Rate Is Highest In U.S. - Nashville News Story - WSMV Nashville

CHATTANOOGA, Tenn. -- A study shows Tennessee's average 9.4 cent tax on every $1 spent is the highest sales tax rate in America. Opponents of the sales tax say it's most unfair to those least able to pay but others favor the sales tax over a state income tax.

The author of the tax comparison study, Tax Foundation staff economist Kail Padgitt, said an increasing number of states are raising so-called "millionaire taxes" on income of the wealthiest taxpayers and so-called "sin taxes" on cigarettes or beer. Padgitt told the Chattanooga Times Free Press the foundation is "definitely seeing more movement upward than downward in taxes on the state level, and the most popular seem to be to target particular types of tax groups."

The nonpartisan study group said the average 9.4 cents combined state and local sales taxes for every $1 spent by consumers in Tennessee is nearly 38 percent more than the median sales tax nationwide. By comparison, the combined state and local sales tax rate averages just over 7 percent in neighboring Georgia and 6.15 percent in Alabama. Although some localities in central Alabama have higher combined rates of up to 11 percent, Tennessee averaged the highest rate among all 50 states. The Tax Foundation said Tennessee derives nearly 57 percent of its tax revenue from sales taxes, third highest among the 50 states.

Critics of Tennessee's reliance upon consumer taxes say it is unfair to the poor and sends consumers to border states to shop. "Tennessee's sales tax is regressive tax so those that can least afford it have to pay the most," said Samantha Maples, a community organizer for Tennesseans for Fair Taxation, a pro-income tax group. "In addition to being unfair, the sales tax also hurts businesses along our borders and it is simply inadequate to fund our government." But Drew Johnson, president of the Tennessee Center for Policy Research, said relying on sales taxes is better than using income taxes to fund government.

Tennessee is one of nine states that does not impose a tax on earned income, although the state does have a Hall income tax on dividend income. "Our sales tax in Tennessee doesn't need to be as high as it is and the government should look for ways to cut spending and waste," Johnson said. "But the sales tax is still the fairest and most responsible way to tax residents of the state. Tennessee is a haven for entrepreneurs because we don't have an income tax."

[Garufa]

Yep. We've had the highest for years. I hate it but what are ya gonna do?

Income tax? That would lower the sales tax rate, but by how much? Not alot.

[Volzfan]

They should take the tax off of food, guns and ammo!

[Guest abailey362]

i now pay 6% on income and still pay 6-7% sales tax down here in GA. I'd gladly pay the 9.25+ instead of the income tax. Hell I'd rather be at 15% sales tax than the combination down here.

[TNTitan]

Who cares? We are still one of the lowest taxed states. Theres a reason wealthy people are flocking to TN in droves. Tax-Friendly Places 2007 | 8 | CNNMoney.com

[Guest jimdigriz]

Yep. We've had the highest for years. I hate it but what are ya gonna do?

Lower spending, and then lower the sales tax?

It's just so crazy it might work!

[TMMT]

The problem with so many wealthy people flocking to this state is, it has the unfortunate byproduct of bringing many who hold liberals views and have the money to donate to liberal politician's campaigns and get them elected.

Something we don't want or need, this state is already a bit messed up we don't need it getting any worse.

[Motasyco]

I lived in upstate NY for a few years. State sales tax + county sales tax equaled over 10% plus 5% state income tax plus my property tax was 10 times ($400 here, $4000 there) higher. Tennessee sales tax is pretty easy for me to swallow.

[Guest GT_Rat]

I too will take a high sales tax over an income tax any day.

[NuTcAsE]

The problem with so many wealthy people flocking to this state is, it has the unfortunate byproduct of bringing many who hold liberals views and have the money to donate to liberal politician's campaigns and get them elected.

Something we don't want or need, this state is already a bit messed up we don't need it getting any worse.

+10000000

[TNTitan]

The problem with so many wealthy people flocking to this state is, it has the unfortunate byproduct of bringing many who hold liberals views and have the money to donate to liberal politician's campaigns and get them elected.

Something we don't want or need, this state is already a bit messed up we don't need it getting any worse.

You are probably, right.. but what are the odds of a Californian coming here and saying "hey - this isn't bad at all, maybe our ideas in CA DONT work as well as we thought?"

I know of several TN transplants from CA who have changed their tune in such a way. Maybe they are special cases.. but I can hope.

[oldogy]

Still a darn good place to live. I'll take the high sales tax over income tax any day. IMO, the only time it really hurts is when you buy a large item. Yeah, food tax does hurt the poor.

oldogy

[Guest coldblackwind]

My parents still live in western NY, state income tax is just about equal to federal (so picture your income tax now doubled), then they have around 7-8% sales tax depending on county, and the property tax on their 2 acres of land, house and barn is somewhere around $6000, on my 27 acres, house and barn, its closer to $600. By the way, NY actually has VIEW tax on your property. IE, if your land has a good view, they tax you on it.

[G27]

Who cares? We are still one of the lowest taxed states. Theres a reason wealthy people are flocking to TN in droves. Tax-Friendly Places 2007 | 8 | CNNMoney.com

Bingo.

[Guest KarlS]

That's scary. Why is the bottom line to every one of these stories the same? The government should learn how to cut spending. Here in NH we have no sales tax or income tax but don't get off the hook so easy. Property tax will kill you. $8500.00 per yr on our last house. Tn still is listed as a destination state regardless of the taxes.

[Guest PapaB]

Another benefit of the sales tax, illegals can't avoid the tax and even tourists help out.

[USMCJG]

Another benefit of the sales tax, illegals can't avoid the tax and even tourists help out.

That's a very good point PapaB.

[Guest 270win]

I am from Arkansas and there are many places there that are just as high as in Tennessee on sales tax. Go to Fayetteville, Springdale, Rogers, and Bentonville and put the state (6%), county, and city sales taxes together and it ends up being often 8.5-9.25% range...not really any different than Tennessee. West Memphis, AR is 9.25%...same as Memphis,TN and the surrounding Germantown, Collierville, Arlington, Lakeland, Millington. If you live in the Little Rock area, you will pay about the same on property taxes as if you live in Arlington, Collierville, or Germantown.

Where you get KILLED back home is paying personal property taxes on new cars, new boats, every year and up to 7% state income taxes. If you don't pay your personal property taxes to the county on your car or boat, you don't get to license your car with the state the next year...so you might as well lump it all together as a 'licensing' fee. Pers Prop taxes on cars depends on the kind of car you drive....you drive a brand new Z71 pickup...you will get popped with at least $400 personal prop tax to Pulaski County (Little Rock)....I like EVERYONE (Much more equal system than Arkansas) paying just $100 a year to Shelby County for my license plate....9.25% sales tax....and NO STATE INCOME TAX!!!!!! It is GREAT!

[Guest HexHead]

Yeah, food tax does hurt the poor.

Maybe we want the poor to leave?

[greenego]

The problem the Libs. have with a sales tax is they think its unfair because the "poor" pays the same rate as the "rich". Never mind that the so called rich spend more and therefore pay more. I really look for another push for an income tax in TN if Obama care passes and they pass many of costs of it to the states.

[Guest cjr]

My home in Texas was appraised by the county at 95k,my taxes were 4,200.00 per year.

My home in East TN. appraises at 325k and my taxes are 1,100.00 per year.

My vehicles varied from 65 to 100 per year to tag in Texas. I just got tags on the Vette it was 24 renewal and 3.54 county fee

Motor home was 24 renewal and 3.56 county fee.

Property taxes are alot easier to swallow here than in Texas.Being self employeed It hurts just as much in TN. as it did in TX. every month as far as payroll.

The veiw I have from my back porch is worth what ever the Gubment decides I need to pay.

[Magiccarpetrides]

CJR...you must be livin right...cause your definitely livin large ;-D All kidding aside...I sell cars for a living and yeah the high sales tax rate doesnt always make it easy to get the sale, but I still much prefer a high sales tax over an income tax any day. At least with sales tax everyone pays the same percentage.

[DuallyNewt]

They should take the tax off of food, guns and ammo!

AND BEER

[Chief07]

Another benefit of the sales tax, illegals can't avoid the tax and even tourists help out.

True.

The sales tax is a user type tax everyone who buys products in Tennessee pays the same. But with no sales tax, a county style government, no inspection on cars and trucks, (except certain towns).

Tennessee is reasonable.

I am leaving New Jersey (please don't hold that against me), I paid just over $5,000 a year in property tax for a 100 x 150 lot, (cheap for NJ), 7% sales tax, 9% state income tax, local school tax, hidden taxes on car registration, professional licenses, cell phone, business tax, and some they still got me for that I can't even figure out.

And above all that I cant get a carry permit!

With 7.5 acres in Greene County that I pay 200 bucks a year on.......

Tennessee is a wonderful place.

[Guest m&pc9]

With the sales tax the way it is everyone pays taxes drug dealers, prostitutes and thugs with stolen money. Why tax the working man only with an income tax. I like the sales tax just the way it is.

Want to pay less tax, Put your money in a savings account.