Random items, i are they subject to sales tax in TN? (Franklin: 2013, rental)

[Johnhw2]

I am considering a move to Tn from Plano Texas. The difference in taxes and cost of living is a big part of why I am considering this move.

The following are some major purchases not subject sales tax in Texas, there are other taxes on some items like auto purchases.

Home purchase is not subject to sales tax or other taxes in Texas
Interest payments on home sales or auto saves are not subject to state sales tax in Texas

Medical professional and other services are not subject to sales ta in Texas.

Many food goods are not subject to sales tax in Texas

Utility payments to local governmental (Water, garbage collection) and to private entities ( Gas and electric companies) are not subject to sales tax in Texas.

Health insurance payments are not subject to sales tax in Texas and Tn treats them the same I think?

Annual car registration, dog permitting etc are similar in both states according to my research.


I know Tn applies sales tax to many food items (lower rate often) and understand it applies sales tx to medical services and supplies, including prescriptions? Texas and Tn both apply a tax to auto sales which are different from general sales taxes which are not applied to these items.

Other wise I think the two states are similar in what attracts sales tax though the rates in Tn are generally higher than in Tx.


Does this seem accurate to consumers living in Tn or who have lived in both states? Overall SALT in Tn for me will be cut in half from around $18k/yr to around $10k/yr as lower combined Hall tax and property taxes on a similarly priced homes make up the decline offset by higher sales taxes of $1-2k/yr.

The other large factor is in my federal taxes as the new tax law leaves almost half of my SALT taxes non deductive in Tx where essentially all those paid in Tn for my situation will deductible for fed taxes. This impact is about $2k/year

So overall state and local taxes (SALT) should be around $10k/yr,The COL is Brentwood/Franklin is the same as where I lived in Texas.

There is much more to life and happiness than taxes but they can be quantified to measure against the intangible factors of family proximity, climate and other all living environment. In my situation I see these intangibles as a net positive as well hence I am considering this option for us, the biggest hurdles are the move at this advanced age and comparable medical specialists for my spouse.

Disclaimer. I'm an engineer and MBA and quantify nearly everything. I am not asking you to do any searches or homework but to answer off your general knowledge so I can chase the specifics with an issues in mind. Only a large magnitude miss of a coupe of thousand a year would be in my analysis uncertainty for this decision. so only looking for large items.

[lluvia]

You're probably already aware that the Hall Tax is being phased out...


https://www.tn.gov/revenue/taxes/hal...tax-rates.html

[Serious Conversation]

Prescriptions are exempt from sales tax.

https://revenue.support.tn.gov/hc/en...-to-sales-tax-

My health insurance comes out as a pre-tax payroll deduction. I was on an ACA plan in 2013 and don't remember it being taxed.

My city water bill doesn't have sales tax applied.

I would review that website's sales tax article base. There are roughly 200 articles there. I don't think the sales tax differences alone will have a massive impact.

[Johnhw2]

Thanks to both of you. I feel pretty confident my analysis captures the main differences and the gap is huge in favor or Tennessee for my situation on the tax and cost of living and quality of life yard sticks. Wife health issues have forced a delay in our long planned trip together to investigate on the ground. We now plan to make it this April her health willing.

[Rangerred]

Utility water is subject to sales tax as it is a product being sold. Sewer, trash, etc. is a service and is not subject to sales tax.

[Johnhw2]

Thanks Ranger

[GWoodle]

Originally Posted by Johnhw2

Thanks to both of you. I feel pretty confident my analysis captures the main differences and the gap is huge in favor or Tennessee for my situation on the tax and cost of living and quality of life yard sticks. Wife health issues have forced a delay in our long planned trip together to investigate on the ground. We now plan to make it this April her health willing.

The basic state sales tax is 7%. Non food grocery items are 5% (most prepared items from bread to deli). Food items (milk, canned food) now lower at 4%.
The county can add 1.5% to 2.75% and cities can add 0% to 0.5%. Depending where you go sales tax can be 8.5% to 9.75%. Nashville/Davidson charges 2.25%.
The TN Department of Revenue site has a tax rate table.

The 2019 Sales Tax Weekend is set for the last weekend in July for clothing ($100), school supply ($100), computers ($1500).

[TheShadow]

Medical services are not taxed in TN. In general, services are not taxed in TN, with some exceptions. ...

https://revenue.support.tn.gov/hc/en...-in-Tennessee-

What services are subject to sales and use tax in Tennessee?
Services specified in the law that are subject to sales tax in Tennessee include:

Rental of rooms, lodging, or other accommodations for less than 90 consecutive days by people in the business of providing overnight lodging services
Providing parking or storing of motor vehicles in a parking garage or parking lot
Providing repair of tangible personal property and computer software, including situations where no new parts are provided or when the customer furnishes the parts
Laundering or cleaning any kind of tangible personal property
Installing tangible personal property that remains tangible property after installation, including stand-alone installation services where installer did not sell the property installed (the installation of tangible property that becomes a part of realty when installed is not taxable)
Installation of computer software
Enriching of uranium materials or compounds
Providing short-term rental of space to a dealer for making sales (e.g., booth rental)
Furnishing intrastate, interstate and international telecommunications services
Sales of prepaid calling cards, prepaid phones and long distance calling cards
Ancillary services (i.e., services associated with telecommunications, such as call waiting & forwarding, caller ID, voice mail and conference bridging)
Video programming services (i.e., cable and wireless cable and broadband television services)
Direct-to-home satellite television services
Services that are not specifically enumerated in the law may be subject to sales tax where the charges for the services (even if separately itemized) are considered part of the sales price of a taxable good or service. Delivery charges, labor and service cost, and services necessary to complete the sale furnished by a seller of a taxable good or service are part of the sales price of the taxable good or service.

March 30, 2017 14:22

[TheShadow]

After moving to TN from CA, we found that we saved on property tax, car registration taxes, and state income taxes, and various local fees imposed by counties and the state. Our sales taxes are about the same, except for groceries being taxed here. But that is not a significant increase for us, totalling maybe $250 per year in taxes on a little over $100/week in groceries (we eat out about 3 times a week for either lunch or dinner). By far the largest savings was on the cost of our home. A similar home in CA would have cost us twice what we paid here, and that lower price, in turn, reduces our property tax beyond simply the lower tax rate. Our property tax in actual $$$, versus the rate, is 1/4 of what we paid on a very similar home in CA.

[Johnhw2]

Originally Posted by TheShadow

After moving to TN from CA, we found that we saved on property tax, car registration taxes, and state income taxes, and various local fees imposed by counties and the state. Our sales taxes are about the same, except for groceries being taxed here. But that is not a significant increase for us, totalling maybe $250 per year in taxes on a little over $100/week in groceries (we eat out about 3 times a week for either lunch or dinner). By far the largest savings was on the cost of our home. A similar home in CA would have cost us twice what we paid here, and that lower price, in turn, reduces our property tax beyond simply the lower tax rate. Our property tax in actual $$$, versus the rate, is 1/4 of what we paid on a very similar home in CA.

Thanks for the info, you confirmed what I have estimated for my situation. I am in a no income tax state (texas) so until Hall Tax phases out fully , I will pay about $3k a year more for this. Property tax is the huge savings. I pay $15k now in Texas and that is after a senior exemption which froze my property tax amounts to the same amount as the as level when I turned 65, this is savings me nearly $5k in additional property taxes on my Plano, Texas home. I plan to spend the same for a home in Williamson County but the property taxes will still be half as much as mine are in Texas after the senior exemption type savings I have now. Sales tax will be slightly higher, $1-2k/yr.

With the current federal tax limit on deductions of $10k, after moving to Tn and after the Hall tax phases out, my savings will be between $10 and 12k/year. For my situation,

Tennessee is a very tax friendly state. So friendly I can not figure out how they pay for the things the same and local government does. My best guess is much less spending on schools and perhaps roads and other infrastructure.