Updated February 9, 2007
Every day shoppers LEAVE Tennessee by car, phone, and Internet
to avoid our high sales tax.
With 50% of the state’s population living in counties that border another state, it's easy for people to avoid Tennessee's high sales tax. THIS MEANS TENNESSEE LOSES REVENUE AND LOSES JOBS!
While our neighbors are cashing in, Tennessee pays the price.
We need a BALANCED tax system to fund public services
With the severe under funding of our education system and other public services, its clear the state needs additional revenue. However, any further increases in the state sales tax would be self-defeating and damaging to the state’s economy.
The solution to Tennessee's budget crisis is real and meaningful tax reform, including the elimination of the tax on food, reduction of the tax on nonfood items, and enactment of a broad-based personal income tax that will lower taxes for most Tennesseans, allow Tennessee employers to compete with other states, and provide the needed funding for state services.
- While the sales tax varies from county to county, the state
and local sales tax on average is 9.4%. In 2002, Tennessee increased the state
sales tax from 6% to 7%, but did not apply the increase to grocery food items.
In 2008, the tax on groceries was reduced to 5.5% Counties and cities can add up to 2.75% in local sales tax to the state rate
for a maximum of 9.75% on non-food items and 7.85% on grocery food.
- On top of the lower state tax on food in MO (3% less than
non-food items), St. Louis (Co. and city) & St. Charles Co. further reduce
the tax on food by 0.1%.
- In July 2005, Virginia Legislators voted to cut the state
and local tax on food to a combined rate of 2.5% (1.5% state plus 1% local).
Virginia also exempts nonprescription drugs.
- GA exempts groceries from the 4% state sales tax, leaving
only local sales taxes. As of October 2005, Dekalb, Rockdale, Taliaferro,
and Webster Counties reduce the local food tax by an additional 1%.
- NC has no state sales tax on groceries, leaving only the
local sales tax. Though county sales tax rates vary on non-food items, all
counties tax groceries at 2%.
- In February 2007, the state food tax in AR was cut in half,
from 6 to 3%, effective July 2007. Local option taxes still apply at an average
rate of 2%
Updated December 20, 2005