Tennessee Works Tax Law (sales, purchases, depreciation)

[GWoodle]

The Tennessee Works Tax Act, according to Lee, totals over $400M in tax cuts, here’s a look at the breakdown of this act:

$273 million for a one-time, three-month sales tax holiday on grocery items to direct relief for Tennessee families from August 1 through October 31
More than $150 million in annual small business tax relief, including raising the exemption threshold for the business tax, exempting the first $50,000 of net income from excise tax and protecting the first $500,000 in property investment from the franchise tax
$64 million to simplify tax administration and conform with the federal bonus depreciation provisions of 2017 Tax Cuts & Jobs Act, allowing businesses to more quickly recover costs and further incentivize investment in Tennessee production
Provides foundation for supporting Tennessee’s continued economic growth, aligning Tennessee with more than 30 states by adopting “single sales factor” apportionment for franchise and excise tax

[Serious Conversation]

Grocery and sales taxes are high. It's beyond my pay grade to say whether those high taxes offset the lack of income taxes among middle and lower income Tennesseans, but it's good to see that other options are being looked at.

[doc1]

Originally Posted by Serious Conversation

Grocery and sales taxes are high. It's beyond my pay grade to say whether those high taxes offset the lack of income taxes among middle and lower income Tennesseans, but it's good to see that other options are being looked at.

One way my wife and I mitigate grocery taxes is we use an Amex Blue Cash card. It pays back 6% on all grocery store purchases.

For gas and restaurants we use a PNC Visa cash back that pays back 3% and 4% respectively.

Everywhere else (e.g. Walmart, Target, etc.) we use a Citicard cashback that pays 2%.

Remember that these cash back rebates are tax free and add up to quite a bit over the course of a year.

[Serious Conversation]

Originally Posted by doc1

One way my wife and I mitigate grocery taxes is we use an Amex Blue Cash card. It pays back 6% on all grocery store purchases.

For gas and restaurants we use a PNC Visa cash back that pays back 3% and 4% respectively.

Everywhere else (e.g. Walmart, Target, etc.) we use a Citicard cashback that pays 2%.

Remember that these cash back rebates are tax free and add up to quite a bit over the course of a year.

I also have the AMEX Cash Blue Preferred. It does help offset grocery bills, but it has nothing to do with the Tennessee tax structure.

High grocery sales taxes are regressive. A lack of an income tax is regressive. Sales taxes are regressive, in general. That is where the state government, and its voters, prefer to place the tax burden, on lower income Tennesseans.

[Ginsaw]

I would advise against equating lack of a state income tax with high grocery costs.

The cost of everything, goods, services, parts of all kinds, across the board is way high, but because of nationwide booming of inflation.

At the same time that's going on, the lack of a state income tax is what is primarily making Tennessee so popular nationwide.

Tennessee is a frequent destination for instance for those fleeing California and New York. And they bring wealth with them.

There are two separate things going on at the same time. One is local, the other is all around in everything, every state. And with different causes.

And it's that inflation which causes what used to be our $100 grocery bill to now be $200 and more. The sales tax didn't create that effective surcharge.

[GWoodle]

FYI the TN state sales tax rate on groceries is 5%, but local tax may add up to 2.75% for 7.75%.

On other goods TN sales tax rate is 7%, add 2.75 to 9.75%.

The local tax may vary by 0.25%.

Per item in a grocery list you have to be careful. Some items at 5%, others 7%.

[Serious Conversation]

Originally Posted by GWoodle

FYI the TN state sales tax rate on groceries is 5%, but local tax may add up to 2.75% for 7.75%.

On other goods TN sales tax rate is 7%, add 2.75 to 9.75%.

The local tax may vary by 0.25%.

Per item in a grocery list you have to be careful. Some items at 5%, others 7%.

That is based on whether something is classified as a prepared food or not. Raw chicken will be taxed at the lower rate, a cooked rotisserie at the higher one.