It's official: Tenn. has the highest sales taxes


NASHVILLE - No wonder that both candidates for governor say they won't raise sales taxes.


A new report by the non-partisan Tax Foundation confirms what most Tennesseans already suspected at the checkout counter: the Volunteer State has the highest combined state and average local sales rate in the country - although some cities elsewhere have higher combined rates.


Local sales taxes in Tennessee - those levied by cities and counties - are capped at 2.75 percent, and are 2.25 percent in Memphis and Shelby County. But statewide, local sales taxes in Tennessee average 2.44. Combined with the 7 percent state sales tax, Tennessee's combined state and local average rate is 9.44 percent - the nation's highest, according to the Tax Foundation a Washington nonprofit that monitors federal, state and local fiscal policy.


After Tennessee, the Tax Foundation reports states with the highest combined state and average local sales tax rates are California (9.08 percent), Arizona (9.01), Louisiana (8.69), Washington (8.61) New York (8.52), Oklahoma (8.33), Illinois (8.22), Arkansas (8.1) and Alabama (8.03).


Memphis and Nashville are tied with San Jose, Calif., for the 13th highest combined sales tax rates - 9.25 percent - among the nation's major metropolitan areas, the Tax Foundation also reports. Both the state and metro area reports are available on the website above.


Birmingham and Montgomery, Ala., share the dubious distinction of having the highest combined sales tax rate - 10 percent - in the nation.


Unlike Tennessee, Alabama's city and county sales taxes are stacked on each other. So in Birmingham, consumers pay 4 percent state sales tax, 4 percent city and 2 percent county sales tax, for a total 10 percent. In Montgomery, it's 4 percent to the state, 3.5 percent to the city and 2.5 percent to the county.


Ouch! At least in Tennessee, you pay a city or county sales tax depending on where the sale occurs - but not both.


On the other hand, Tennessee is among 17 states that tax food to varying degrees, which progressive tax-policy advocates decry. Tennessee discounts the sales tax on food in grocery stores (not restaurants) by 1.5 percentage points; that is, the state sales tax applied to grocery food is 5.5 percent rather than the full 7 percent. Local sales taxes are added on top of the 5.5 percent.


According to the Federation of Tax Administrators Tennessee is one of 10 states that provide some sales tax discounts - either state or local or both -  for food purchases. Two others - Alabama and Mississippi - apply their full sales tax rates to food. Five state - Hawaii, Idaho, Kansas, Oklahoma and Wyoming - tax food but provide rebates and/or tax credits to low-income households.


Tennessee's sales taxes are high, of course, because we rely on them to fund government more than most states do. Seven states don't have individual income taxes at all: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two - New Hampshire and Tennessee - have a limited income tax that taxes only unearned income such as some interest and dividends, according to the FTA


Surprisingly, given the current anti-tax political environment, three states have increased their sales or income tax rates this year, according to the Tax Foundation.

• Arizona voters approved - by a 64 to 36 percent margin - increasing their sales tax from 5.6 percent to 6.6 percent.

• The Kansas legislature increased its sales tax rate from 5.3% to 6.3%.

• Oregon voters approved - by a 54 to 46 percent margin - a state income tax increase retroactive to Jan. 1, 2009.


Meanwhile, neighboring Arkansas enacted another decrease in its sales tax on grocery food, now subject to 2 percent in state sales tax rather than 3 percent. Local sales taxes may be added.



This article doesn't take into account the entire tax picture. Tennessee is one of the best states in the country for providing total value and services to its citizens based to the total state taxes that are paid. The state really should provide a more fair tax system, balancing income, sales and property taxes. However, an income is unpopular with the voters and therefore, not supported by either gubenetorial candidate. The "fair" thing to do would be to elimiate sales taxes on at least food and maybe some other essentials and to inact some type of income tax like most other states do. This way sales and property taxes wouldn't have to be as high. However, if we want services from the state, and we do, then they must be paid for and we can choose to pay higher sales taxes and property taxes in lieu of no income tax unless you are lucky enough to have enough non-earned income to qualify for a state income tax.

What's up, just wanted to tell you, I enjoyed this post. It was practical. Keep on posting!

Following I noticed the motion picture, I had to look at the dish and above the
decades I have hopefully enhanced on the unique recipe I identified.

Deep frying wings has always been the manner in which most people will cook them, yet what
a lot of people do not fully understand is that you can make
them lots of different ways. 6 medium carrots, cut into 2 inch pieces and halved lenghtwise.

Pandoras Box may furthermore possibly be substantially complex should you are not excellent applying this.
Most of the time the client is not aware of these habits,
and it requires some real work on my part just to convince them that they
exist in the first place. The best seductions I've ever done were always the
ones where I made a critical error.

Leave a comment

Type the characters you see in the picture above.

  • About

As the process for merging Shelby County's schools accelerates into action, we'll provide bonus coverage here at, with a particular focus on the 21-member transition team and the 23-member unified school board. Comment early and often. If you have any tips or suggestions you wish to share, contact Zack McMillin at or 529-2564.

  • Zack McMillin on Twitter