Sales Tax (Franklin: real estate, rental, mortgage)

[dreading the move]

Can someone tell me what the sales tax rate is in Franklin area. Does it flucuate according to what you are buying? Yesterday I purchased two drinks at a Dailys convenience store priced on the shelf at 2.49 each. Register rang up 5.80 and I paid and went on my way. For some reason I did not catch it then, but thought about it later. Is sales tax over 17% in a convenience store or maybe price wrong on the shelf?

I am still stunned everytime I get my total at a store. Sales tax is so high. No wonder they finally let no income tax states take there sales tax as a deduction. I can already see we will pay more in sales tax than we did in state income tax.

[46Barb]

I think they charged you more than 2.49. I believe the sales tax is 9.75%.

[denawilliams]

Franklin is 2.25 on top of the 7%, so 9.25%, but as we've said before, groceries are lower.

Honestly, we really do have it good here. Yes, our sales tax might be a tad higher than in other areas, but we definitely make up for it in all of the other areas we get tax breaks.

[Eescapes]

I will be moving to the area in May. I was just wondering what kind of "tax breaks" you are referring to. I have heard that there is no state income tax. So, generally sales tax is 7% other than the additional in Franklin? I live in NC now and groceries are lower than dry goods here. Also, what is the personal property tax like? Specifically on cars?

Thanks!

[denawilliams]

No, most areas are 9.25% sales tax in Middle TN, but depending on county, it might go as high as 9.75%. You have the state portion that is 7% and then the county/city portion is added to that (which is 2.25 to 2.75). So generally, you are at 7.75% on foods and 9.25% on most everything else. We have no state or local income taxes, which if you're coming from an area where you were taxed on multiple levels of your income, it's a huge difference. Property taxes vary from county to county, but overall they are low in comparison to many other areas. Generally 1% of purchase price or in some counties much less.

I'm going to borrow a quote from tnkudzu who broke everything down nicely in another thread...

There is no Sales Tax on purchasing Real Estate.

There is no Tennessee Capital Gains Tax on Real Estate or Stocks.

There is no Income Tax in TN.

There is a 6% Tax on Dividends and Interest with Exemptions: The first $1,250 in taxable income received by a single filer is exempt. The first $2,500 in taxable income received by a joint filer is exempt.

There is a Real Estate Transfer Tax of $0.37/100 and a Mortgage principle Tax of $0.115/$100.00 with a $2000 exemption.

There is a State Sales Tax of 5.5% on Food Items and 7% on tangible personal property + variable County/City Tax.

Vehicle and Boat purchases are taxed different. The State Tax at 7% plus the County Local Option Tax with a max limit. The Tax on a $20,000 car would be $1,400 State Sales Tax and $44.00 for a County with 2.75% sales tax.

Federal Capital Gains Taxes apply no matter what state you reside in. On Owner occupied Rea Estate when you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, $500,000 if you're married, and not owe any tax.

The property you're selling must be your principal residence. That means you live in it. This tax break doesn't apply to a house or other property that you have solely for investment purposes. In those cases, the usual capital gains rules apply.

You can, however, turn a rental house into your primary residence, making the sale of it eligible for the exclusion. This is accomplished when you meet the IRS use and ownership tests: You own and live in the home for two out of the five years before the sale.

Here is a Table for State Capital Gains Taxes:

Capital Gains Taxes

[IngleDave]

To answer your question on personal property such as boats, cars, etc. There is none. That, in itself, is a huge benefit. Many people here have never heard of such a thing.

[60439]

Dena I appreciate your valuable information, but groceries are not cheaper here. That is a misconception. They are equivilant to other areas I have lived. Not higher and not lower, the same. So there is no savings in my opinon on groceries, and most other areas have no sales tax on groceries.

[Teacher2Be]

Coming from an area where my sales tax rate is 8.623%, paying 9.75% isn't too much higher, then enjoying the extra cash in my paycheck due to no state tax will be lovely.

I do think you were charged more than 2.49 each though.

[alleycat]

I'm seen varies rankings of states with the highest and lowest taxes. Tennessee usually comes in somewhere around the tenth lowest overall.

Of course, it depends on someone's income and a lot of other factors. The higher their income bracket, the better someone is in Tennessee by not having to pay an income tax (even though the sales tax is high).

Personally, I think the 800-pound gorilla in all of this is the federal income tax. I pay a fairly large chunk in both sales and property tax, but nowhere close to what I pay in federal income tax.

[nbourbaki]

Originally Posted by 60439

Dena I appreciate your valuable information, but groceries are not cheaper here. That is a misconception. They are equivilant to other areas I have lived. Not higher and not lower, the same. So there is no savings in my opinon on groceries, and most other areas have no sales tax on groceries.

I read Dena as saying the tax on groceries was lower than the regular sales tax.