Tennessee Sales Tax Rate 2nd Highest In U.S.

Image Credit: tn.gov

The Center Square [By Jon Styf] –

Tennessee has the second-highest sales tax rate in the country, according to a new report from the Tax Foundation.

Tennessee has an average of 9.548% as a local and state tax rate, falling just below Louisiana’s 9.550% for the top spot. Forty-five states and the District of Columbia have sales taxes.

Alaska, Delaware, Montana, New Hampshire and Oregon do not.

Tennessee is one of nine states without a state income tax, along with Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Washington and Wyoming.

New Hampshire and Washington collect specific income taxes but not on regular income, just interest or capital gains.

For the first five months of the fiscal year, Tennessee collected $1.1 billion in sales taxes, which is $598.5 million more than the budgeted estimate.

In December alone, sales tax collections were $118.8 million more than the budget. Overall, Tennessee has collected $959.9 million more than the budgeted estimate for the fiscal year.

The sales tax growth, however, has slowed in recent month.

“Sales tax receipts, reflecting November retail sales activity, moderated significantly and correspond to the slowest rate of gain since September 2020 when it was 1.56%,” said Tennessee Department of Finance and Administration Commissioner Jim Bryson. “While concerning, November’s modest sales tax growth was anticipated because of accelerated sales activity during this same time last year when supply chain disruptions altered purchasing behavior.”

About the Author: Jon Styf, The Center Square Staff Reporter – Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Follow Jon on Twitter @JonStyf.

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