grocery tax in Tennessee?? (Memphis, Knoxville: transplants, good credit, house)

[An Einnseanair]

From HERE (http://www.state.tn.us/revenue/faqs/salesandusefaq.htm#20 - broken link):
What is a "single article," and how is sales tax on a single article calculated?
A single article is defined as one item of tangible personal property in the form that it is delivered from the seller. The 7% state tax applies to the entire purchase price of the item. The applicable local sales tax rate applies the first $1,600 of the sale of a single article. There is an additional state tax of 2.75% applied to the amount in excess of $1,600 but less than or equal to $3,200.

And HERE (http://www.state.tn.us/revenue/forms/sales/singlearticle.pdf - broken link) is a pdf with further explanations. You have to pay the full 7% state rate on all items, including cars, but the local rate is capped at various amounts depending on the location. Hamilton County caps the local tax at $1600 * 2.25% = $36. But you still have to pay the 7% state tax, so the sales tax on a $20,000 vehicle (or "use tax" if you buy it out of state) is $36 + $20,000*7% = $1436.

So yeah, it's less than the max of 9.75%, but still way higher than most other states for vehicles.

[Big TR]

The thing about harping about grocery tax is let's say you spend $100 a week on groceries, $5,200 per year. Even if there is a 7% delta between TN and IL rates, you're talking about an extra $30 per month for groceries due to the taxes by living in TN.

This is offset by an order of magnitude when you factor in income and property tax savings.

[Big TR]

Originally Posted by LLuce

I don't know where exactly you grew up but houses aren't cheap around here and I'm in East Central Illinois. I guess what you consider "cheap" is important. But I'll agree with you on one thing, there is no business around here anymore. Everything has moved out or shut down, but housing is still not cheap. Property taxes are ridiculous! $4000 on my 1750sq ft. home valued at $185,000. And that is no way what is considered an expensive home for this region. Middle of the road I would say.

Then of course there is utility costs etc. to consider. But despite all that, TN has to be cheaper than Illinois. I'm hoping....

I grew up here....Crawford County Real Estate

There's scores of towns from my hometown of Robinson north to Danville and west to Springfield that are dirt cheap for housing.

We left Illinois (Suburban Chicago) precisely because income and property taxes were outrageous. I can tell you it is saving us $15k-$20k each year in taxes by moving to TN.

[J&Em]

The little difference between tax on a car (which is a once in 10+ years purchase- for me anyway) in TN and most states is at worst a couple of percent if you use the following chart as an indication of state taxes and don't include local taxes.

Sales taxes in the United States - Wikipedia, the free encyclopedia (go to the bottom for the chart)

Most states seem to be around 5-7% without including local taxes. This means that the tax burden for a one time purchase would be at worst $600-700 more than a state with 5% sales tax, and that includes the local additions already discussed. I crunched the numbers for a $25,000 and $30,000 vehicle to get a range for an *average* car. Considering that just the registration and inspection costs in NY over 10 years would have easily cost the same as that difference and sales tax with local taxes added for the county I lived in would have been just shy of 9% I actually come out ahead.

None of the tax charts will cover true tax burdens for every person as it will vary by locale, but 33 states have sales tax of 5% or more and additional local taxes. Some have slightly lower sales taxes, but then have yearly taxes on the vehicle which also don't show up in the comparisons made. TN does seem to live up to its number 3 rank for least burdensome taxes. I'll happily pay the grocery tax if they keep it that way!

[Pam& Bill]

I'm going to jump in here without links or tax rates. I only have my own personal experience to offer. I moved to Tn. from upstate NY 4 years ago. I'm medically retired, so I'm making the same amount monthly here that I was in NY.
I no longer have all the little money drains such as toll roads( NY state Thruway), $5.00 a bag of garbage to dump it, high registration fees, yearly inspections, and of course NY state income tax. My rent is cheaper and I have 1 more bed and bath here. Lets not forget the license to drive costs too.

I'm not quite sure what the OP are trying to say or even JKilgore. Living here in Tn. I have a affordable lifestyle and I can pay all my bills every month and still buy food. I never even think about sales tax here because I know in the grand scheme of things, I'm getting a much bigger bang from my buck. I'm not being nickeled and dimed to death in Tn. as I was in NY. I agree with J&Em, I'll happily pay my share to the state of Tn. because living here for me is better then NY.
I suspect that those that are unwilling to move here will find every reason to bring up negative reasons not to. And that is fine. I'm here, love it and will never go back to NY. Normally I don't answer these type of posts, because I already live here, I don't have to defend the sales tax rate. I still know my money gets me further here on a monthly, yearly basis.
Pam

[An Einnseanair]

Some states do not tax certain forms of retirement income (such as Georgia), which negates TN's biggest advantage. I was simply pointing out that fact to the OP.

I'm definitely not trying to keep someone from moving to TN, even someone who wants to retire here. TN's huge tax advantage is because they have no state income tax. Other costs are higher; sales tax mainly, but also corporate taxes and professional taxes are higher. I'm a professional engineer registered in 10 states; I pay more for my TN registration than I do for all 9 other states combined. But ultimately, if you have normally taxable income, TN is way up there with one of the lowest overall tax burdens. Throw in cheap electricity from the TVA's extensive network of dams, coal, and nuclear plants; no personal property tax; and relatively cheap housing, and TN is cheaper than upstate NY by a long shot.

The OP's grocery bill will go up DRASTICALLY. It happened with us when we moved from Kansas City to Chattanooga. But the overall tax burden will go down, so you're better off.

[LLuce]

Originally Posted by J&Em

As a former NYer I usually don't even bother answering when someone declares Tn to be too expensive and too high in taxes. I'm too busy laughing.

Who said it's too expensive and too high in taxes? I was just asking about the taxes on food. I don't know how all this other stuff came about. And it's not nice to laugh at anybody just wanting information.

[J&Em]

Originally Posted by LLuce

I was just looking at an article comparing tax on groceries between states. I live in Illinois and we have a 1% tax on groceries. I can't believe that TN is one of the states with the highest tax rate on groceries!! Holy Cow! Like 6 percent?? Is that for real? That's our state sales tax where I live, (actually our state sales tax in my area is 6 1/4 %) And Tennessee's sales tax is like 9.25% ? Wondering if retiring in Tenneesse is really gonna be that much lower for us tax wise. Cost of homes sure isn't any lower either. You got us beat hands down on property tax though.

Originally Posted by LLuce

Who said it's too expensive and too high in taxes? I was just asking about the taxes on food. I don't know how all this other stuff came about. And it's not nice to laugh at anybody just wanting information.

No where did I mention you by name, nor did I say I was laughing at someone asking for help or information, so why the sudden reaction?

Your OP stated that the tax on food was too high, way too high when compared to your state. If this one tax, taken all by itself is so very worrisome it might be a good idea for you to stay in IL, you'll be much happier saving on your food bill.

My comment came from the fact that over the last few years there have been quite a few threads started by people, like you, who focus on one tax and declare TN is too expensive to live in or retire to, usually with an OMG phrase thrown in. People say no its not true, giving their own personal experiences or reasons. Then someone trots out the total tax burden, which invariably places TN near the bottom of the list of expensive states to live in. After a pattern of "the sky is falling" type posts on the subject one tends to laugh at yet another "gasp, your taxes are so high when compared to my *name-the-place-you-want-to-escape-from-because it-costs-so-much* type post. No one is laughing at a query asking for help (there wasn't any help asked for), but I would hope we can laugh a "here we go again" laugh without it being taken personally.


The highways here are always kept in repair, the general infrastructure is kept up and clean, especially compared to many of the states north of here (I've been in NY,NJ, CT,PA,OH, and very recently in MO,IN, IL,KY for comparison). Basic services are provided (without huge deficit spending) just as in most other states. Since there is no income tax to speak of (with a handful of exceptions), property taxes (for most places in the state) are low and most fees and other recurring costs are also lower than just about any state ---where is the money for keeping up the state supposed to come from? In TN it comes from taxes on everything you purchase. As retired people we have to keep tabs on things we spend on. I am very aware of how much we pay in tax and I can say for a fact we still come out far ahead.

[Pam& Bill]

Originally Posted by J&Em

No where did I mention you by name, nor did I say I was laughing at someone asking for help or information, so why the sudden reaction?

Your OP stated that the tax on food was too high, way too high when compared to your state. If this one tax, taken all by itself is so very worrisome it might be a good idea for you to stay in IL, you'll be much happier saving on your food bill.

My comment came from the fact that over the last few years there have been quite a few threads started by people, like you, who focus on one tax and declare TN is too expensive to live in or retire to, usually with an OMG phrase thrown in. People say no its not true, giving their own personal experiences or reasons. Then someone trots out the total tax burden, which invariably places TN near the bottom of the list of expensive states to live in. After a pattern of "the sky is falling" type posts on the subject one tends to laugh at yet another "gasp, your taxes are so high when compared to my *name-the-place-you-want-to-escape-from-because it-costs-so-much* type post. No one is laughing at a query asking for help (there wasn't any help asked for), but I would hope we can laugh a "here we go again" laugh without it being taken personally.


The highways here are always kept in repair, the general infrastructure is kept up and clean, especially compared to many of the states north of here (I've been in NY,NJ, CT,PA,OH, and very recently in MO,IN, IL,KY for comparison). Basic services are provided (without huge deficit spending) just as in most other states. Since there is no income tax to speak of (with a handful of exceptions), property taxes (for most places in the state) are low and most fees and other recurring costs are also lower than just about any state ---where is the money for keeping up the state supposed to come from? In TN it comes from taxes on everything you purchase. As retired people we have to keep tabs on things we spend on. I am very aware of how much we pay in tax and I can say for a fact we still come out far ahead.

Well said!
Pam

[marmac]

Originally Posted by gumpop

Perhapos, but if you move in your 40's you can save enough by not paying income tax to have a nice retirement fund!

Depends on how big of a pay cut one has to take to move to TN.