Grocery Tax in Tennessee (Franklin, Springfield: sales, how much, homes)

[mattran]

I'll be relocating to Nashville next month & I understand that the state of Tennessee taxes food/grocery items; but, doesn't have a state personal income tax.

In google searches about the grocery tax, it appears that many/most Tennesseans feel this tax is unfair since other states do not tax food purchases.

My question: doesn't a lack of a state personal income tax outweigh the burden of being taxed for groceries? I'd be especially interested to hear what others who have moved into Tennessee from other states (with income tax) have found.

In my particular case, I'm a single guy who spends about $80 a week at the supermarket. I believe that Tennessee taxes 5.5% for groceries (correct me if I'm wrong.) Over the course of the year, I'd be paying roughly $230 in grocery tax.

Compared to what I'm 'donating' to my current state in personal income tax, this is a mere drop in the bucket.

I'm curious what others have experienced & appreciate feedback.

Thanks!

[DonCorleone]

The income tax is a touchy subject around these parts...we almost had one about 8 years ago but overwhelming public opposition killed it.

Personally, I'd much rather have taxes on groceries and higher sales taxes in general than an income tax. Our lack of an income tax has spurred a lot of development here that I don't think we'd have received otherwise. I'd *like* to see the sales tax on groceries curbed or done away with entirely...but as long as the state is cutting back services and laying off employees, I don't think it's going to happen anytime soon.

[alleycat]

Don't forget that there's is also a local sales tax in additional to the state portion.

Some people feel that having a high sales tax and no income tax on wages is unfair to the people on the lower economic scale and would like to see a state income tax with a lower sales tax. Many others would not (including me). We talk about state taxes or local taxes or federal taxes as though they were completely separate things, but in fact they're not (it's all goes into that big grab bag of what we pay in taxes as citizens of the United States). We all pay a certain amount of taxes (whether federal or state or local) based on our incomes, our property, our spending, etc. While sales tax does affect the poor proportionally more than the affluent, income and property taxes affects the middle class and affluent more than the poor. Without a sales tax, some people would pay almost no taxes even though they use a considerable amount of government services.

Even the states with an income tax also have a sales taxes. It's generally lower than Tennessee's, especially on food, but, as you've noticed, a lower sales tax generally doesn't offset a 5 or 6% income tax if you make above a certain income.

All of this is just a way of saying that generally Tennessee is a low tax state compared to most others. I usually see Tennessee listed as something like the 10th lowest in terms of taxes.

I'll kindly get off the soapbox now and leave it to someone else.

[scarletneon]

Originally Posted by mattran

In my particular case, I'm a single guy who spends about $80 a week at the supermarket. I believe that Tennessee taxes 5.5% for groceries (correct me if I'm wrong.) Over the course of the year, I'd be paying roughly $230 in grocery tax.

Compared to what I'm 'donating' to my current state in personal income tax, this is a mere drop in the bucket.

I'm curious what others have experienced & appreciate feedback.

Thanks!

The sales tax on groceries is generally around 8.25-8.75. I don't know if they revoked the crazy rules about how if it wasn't made with certain ingredients, then it was still the 9.25 or whatever.

That much tax on groceries is ridiculous. Everybody needs to buy food, whether you make $10K a year or $100K.

[groovamos]

I've wondered about the high Tennessee sales tax and have a theory about it. When I say high, its because I'm in Texas which has no state income tax, and a sales tax of 6.25% which may be in addition to a maximum 2% going to local taxing authorities (municipal, school and transit districts etc.) So as a resident of a large city I pay the maximum 8.25% on everything except groceries, which are tax free. This is a good bit less than the TN maximum 9.75%, plus a smaller sales tax on groceries, 8.25%. And TN taxes capital gains, TX does not.

My theory is that since TN has a state administered socialized health care boondoggle, Tennesseans are paying dearly for fraud and waste, not to mention attracting tax absorbers to the state. An economist would term this "mis-allocation of scarce resources". I remember following the debate during the ramp up of the policy debate on TennCare wondering what must you guys be thinking. As if there has ever been public financing of a large scale social engineering program which has ever been anything but a defrauding of the taxpayer. Sure enough, years after the program introduction, an audit found a couple of hundred thousand beneficiaries of the program living out of state. I found myself with the uncomfortable "satisfaction" of thinking how right my initial sentiments had been.

The state bureaucrats seem to be continuing to maintain that this system has eaten up no additional tax money, but this is also a fraud, not to mention a preposterous violation of common sense. How else can you explain the dramatically rising sales tax rates and imposition of capital gains tax on a population with less per capita income than that of Texas?

[46Barb]

Even though there's a tax on groceries here, I'm finding better prices at the grocery stores down here than up north so I'm not spending any more on groceries than I used to. Some things are actually costing me less.

[rossc]

If you are North of Nashville...or not...you could go to Kentucky for groceries. No sales tax on food there. I know a lot of people up around Springfield do that. I could see it being worthwhile for a large family or if you make once a month food shopping runs.

[teebird1012]

Originally Posted by rossc

If you are North of Nashville...or not...you could go to Kentucky for groceries. No sales tax on food there.

Yes and we love it so!

[septimus]

Originally Posted by groovamos

I've wondered about the high Tennessee sales tax and have a theory about it. When I say high, its because I'm in Texas which has no state income tax, and a sales tax of 6.25% which may be in addition to a maximum 2% going to local taxing authorities (municipal, school and transit districts etc.) So as a resident of a large city I pay the maximum 8.25% on everything except groceries, which are tax free. This is a good bit less than the TN maximum 9.75%, plus a smaller sales tax on groceries, 8.25%. And TN taxes capital gains, TX does not.

My theory is that since TN has a state administered socialized health care boondoggle, Tennesseans are paying dearly for fraud and waste, not to mention attracting tax absorbers to the state. An economist would term this "mis-allocation of scarce resources". I remember following the debate during the ramp up of the policy debate on TennCare wondering what must you guys be thinking. As if there has ever been public financing of a large scale social engineering program which has ever been anything but a defrauding of the taxpayer. Sure enough, years after the program introduction, an audit found a couple of hundred thousand beneficiaries of the program living out of state. I found myself with the uncomfortable "satisfaction" of thinking how right my initial sentiments had been.

The state bureaucrats seem to be continuing to maintain that this system has eaten up no additional tax money, but this is also a fraud, not to mention a preposterous violation of common sense. How else can you explain the dramatically rising sales tax rates and imposition of capital gains tax on a population with less per capita income than that of Texas?

TN has higher sales tax but our property taxes are a lot lower than TX. I have friends in TX paying 2% of their homes' value every year in property tax. My property tax in Franklin is roughly 0.6% of my home's value

[JMT]

I'm all for a sales tax as opposed to an income tax. With a sales tax, you have complete control on how much taxes you pay, and you ALWAYS have the option of buying something cheaper. If you can't afford the sales tax on a $15,000 car, buy a $14,000 car. If you can't afford the sales tax on a $3 loaf of bread, buy a $2.50 loaf of bread. Or bake your own bread. But once they start taking money out of your income, you're stuck. How many of us (other than politicians) can just give ourselves a pay raise?

And as far as a sales tax on groceries being a burden to the poor: poor people don't pay a sales tax on groceries because poor people get free food.