The federal income tax deadline looms, but Tennesseans have reason to celebrate.
As of April 5, Tennesseans collectively had made enough money to pay their total federal, state and local tax bill for 2014, according to the Tax Foundation’s annual Tax Freedom Day calculations.
Tennessee has one of the earliest Tax Freedom Days in the country, according to the Washington, D.C. based think tank’s annual report. Only Louisiana (March 30), Mississippi (April 2), and South Dakota (April 4) achieved tax freedom earlier this year.
For the nation as a whole, Tax Freedom Day arrives on April 21 — three days later than last year “due mainly to the continuing economic recovery, which will boost federal tax revenue collected through the corporate, payroll, and individual income tax,” according to a news release.
“Arguments can be made for why the collective tax bill is too high or too low, but in order to have an honest discussion, it’s important to understand where we stand,” Tax Foundation economist Kyle Pomerleau said in the release. “Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels.”
Other highlights from the Tax Freedom report:
— Americans will spend more on taxes in 2014 than they will on food, clothing, and housing combined.
— Americans will spend 42 days working to pay off income taxes, 15 days for excise taxes, and 11 days for property taxes.
— Americans will pay $3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.5 trillion, or 30.2 percent of the nation’s income.
The Tax Foundation, which generally is critical of all tax increases, describes itself as a nonpartisan tax research group.
Click here for the full Tax Freedom Day report.
Drink up and support state government. Tennessee’s tax system is one of the most business-friendly in the country, but not so when it comes to taxes for your favorite adult beverage.
Tennessee ranks sixth on the “Worst States for Alcohol Taxes” list complied by NerdWallet, a financial information website founded by a former hedge fund analyst and a derivatives trader.
Beer drinkers pay the highest taxes at 11 cents per standard drink, the highest beer tax in the country, according to the NerdWallet analysis of alcohol taxes for all 50 states.
Arkansas has the next highest beer tax at 10 cents per standard drink.
Tennessee taxes on wine and spirits are considerably less stiff at 5 and 5.2 cents per standard drink, respectively, NerdWallet says. The relatively low rate on spirits is understandable given that Tennessee is the home of the iconic Jack Daniel’s Distillery.
The worst state for alcohol taxes is Washington, where the tax on spirits is a whopping 41.3 cents per standard drink.
To compile its rankings, NerdWallet says it, “crunched to numbers to find the states with the highest taxes on alcohol and compared those numbers with the total volume of beer, wine and spirits consumed in each state. The result? A definitive guide to which states tax their citizens the most for their enjoyment of booze.
Click here for the NerdWallett report.
Click here for Tennessee Department Revenue info on alcoholic beverages taxes.
When it comes to taxes, Tennessee continues to be one of the most business-friendly states in the country, according to a Tax Foundation report released today.
Tennessee ranks 15th on the 2014 State Business Tax Climate Index, unchanged from a year ago.
The index reflects the tax climate of each state as of July 1, 2013.
The Volunteer State has a more business-friendly tax climate than all neighboring states and in the southeast region, only Florida ranks higher at No. 5.
Wyoming has the nation’s most business-friendly tax structure, followed by South Dakota, Nevada, Alaska, Florida, Washington , Montana, New Hampshire, Utah and Indiana.
The most unfriendly states for business taxes are mostly on the coasts and in the northeast. The bottom ten are Maryland, Connecticut, Wisconsin, North Carolina, Vermont, Rhode Island, Minnesota, California, New Jersey and New York.
The Tax Foundation evaluated five types of taxes — corporate, individual income, sales, unemployment insurance and property taxes.
Not surprsingly, Tennessee ranked best — No. 8 — in individual income tax and worst — No. 43 – in sales tax. Tennessee has one of the highest combined state and local sales tax rates in the country.
Tennessee’s tax climate gives it an edge over most other states in the business recruitment.
Here’s an excerpt from the report:
“It is important to remember that even in our global economy, states’ stiffest and most direct competition often comes from other states. The Department of Labor reports that most mass job relocations are from one U.S. state to another, rather than to a foreign location. … State lawmakers are right to be concerned about how their states rank in the global competition for jobs and capital, but they need to be more concerned with companies moving from Detroit, MI, to Dayton, OH, rather than from Detroit to New Delhi. This means that state lawmakers must be aware of how their states’ business climates match up to their immediate neighbors and to other states within their regions
Click here for the full Tax Foundation report.
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.
Tennessee is in the bottom half of a new study that measures the tax burden businesses would face in each of the 50 states.
The Tax Foundation study released today ranks states based on the tax liability for both mature and new businesses. Tennessee is 29th in both categories, which means it has a heavier tax burden than most of the country.
“Corporate taxes on the state level rarely treat all comers equally, leading to sometimes dramatic disparities in the cost of doing business,” Tax Foundation president Scott Hodge said in a news release. “Tax preferences and incentive deals can distort the playing field based on how long a business has been operating, whether it’s a manufacturing or retail operation or whether it’s moved from another state to set up shop.”
A two-year delay in requiring Amazon to collect Tennessee sales taxes could move a step closer to reality Tuesday with votes scheduled by state House and Senate committees.
Gov. Bill Haslam is pushing for the delay and supports a federal solution to the sales tax issue. Waiting two years to make Amazon collect taxes on sales to Tennessee residents is a whole lot better than never making the online retailer collect state taxes, which was the original deal brokered by his predecessor, Haslam says .
Maybe so, but waiting till 2014 still leaves a lot of money on the table – something like $22 million a year in state sales taxes and $9 million a year in local sales taxes.