Workers of Tennessee, take the day off. You’ve earned it. While most of the country will work
another two weeks or more to reach Tax Freedom Day, Tennessee workers passed that milestone on March 31, according to the Tax Foundation.
Tennessee has the lowest average tax burden in the country this year, the foundation says.
Tax Freedom Day represents how long it will take the average worker to earn enough money pay his or her total federal, state and local tax obligation for the year. For the nation as a whole, Tax Freedom Day this year comes on April 17.
“That means Americans will work 107 days into the year, from January 1 to April 17, to earn enough money to pay this year’s combined 29.2% federal, state, and local tax bill,” the foundation says.
Not surprisingly income taxes take the longest to pay off.
“Five major categories of taxes dominate the tax burden. Individual income taxes – including federal, state and local – require 40 days of work. Payroll taxes take another 23 days of work. Sales and excise taxes, mostly state and local, take 15 days to pay off. Property taxes take 12 days, and corporate income taxes take another 10,” says a foundation news release.
Tennessee has the highest sales tax rate in the country, but benefits from having no state income tax.
In contrast, residents in states with the highest income taxes work longer to pay their total tax obligation. In Connecticut workers must wait till May 5 for Tax Freedom Day. In New Jersey and New York it comes on May 1.
The Tax Foundation is the oldest nonproft tax think tank in the country.
Click here for the foundation’s Tax Freedom Day report.