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.
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.
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.
Tennessee is the 14th best state for taxes on business, according to the Tax Foundation’s look at state tax policies.
The 2012 State Business Tax Climate Index released Wednesday compares states on five different categories – major business taxes, individual income taxes, sales taxes, unemployment insurance taxes and property taxes.
Not surprisingly, Tennessee’s ranks highest – 8th – in the income tax category and worst – 43rd – in the sales tax category. Tennessee does not tax individual wages or salaries. However, Tennessee’s combined state and local sales tax is the nation’s highest at 9.4 percent, the report says.
Comparing state business tax policy is important because a state’s biggest competition for new businesses comes from other states and not the threat of losing jobs to other countries, the report says.
It looks like Gov. Bill Haslam is ready to make Amazon.com start collecting Tennessee sales taxes .
According to a story in the Tennessean, The governor wants “to work out some arrangement that works for them to stay and grow in Tennessee and yet for us to collect the sales tax that we need,” Haslam said. “We would hope to do something prior to the legislature coming back” in January.”
The governor’s comments are good news for Tennessee businesses.
It’s no surprise that several readers took issue with my point of view. My favorite reader comment was from rustyvango#1397221: “just another tie wearing money grubber who should be dealt with most harshly for being stupid enough to write this column.GO GET HIM!!!!!”
I appreciate all reader comments, but there is reason to insult my ties. I like my Jerry Garcia collection — they’re beautiful ties.
Amazon.com continues to attract the kind of publicity that most companies seek to avoid. From coast-to-coast, public voices are blasting the online retailer for its refusal to collect sales taxes.
Here are some recent excerpts.
Bloomberg: “There are lots of good reasons to shop online, but dodging sales taxes shouldn’t be one of them. Amazon.com Inc. (AMZN) is battling the authorities in its largest state market, California, over this principle. The good arguments are on the Golden State’s side.”
Amazon.com’s effort to escape collecting sales taxes in Tennessee suffered another blow on Tuesday. This time from state Attorney General Bob Cooper who issued a ruling that says a proposed law that would mandate that the online retailer collect state sales taxes when it opens facilities in the state is constitutionally sound.
Cooper’s opinion will bolster efforts to pass the bill sponsored by Sen. Randy McNally, R-Oak Ridge, and Rep. Charles Sargent, R-Franklin when the Legislature meets next year.
Amazon.com knows it should be collecting sales taxes on purchases in Tennessee and othere states where it has an office, store or any physical presence. A deal the online retailer has offered Texas proves it.
Amazon has promised to create 5,000 jobs and invest $300 million in new distribution centers in Texas if the state lets the company “off the hook for collecting sales taxes from its Texas customers over the next 4 ½ years,” according to The Dallas Morning News.
Presumably, the company would start collecting sales tax after 4 ½ years.
Internet retailer Amazon.com Inc. isn’t always opposed to expanding in states where it is required to collect sales taxes.
The company announced this week that it would build a new fulfillment center in Sumner, Wash. Amazon, which is based in Seattle, Wash., already collects state sales taxes on purchases made by Washington residents.
The company plans to build Tennessee fulfillment centers in Hamilton and Bradley counties, but state government has waived the rule that would have required Amazon to collect local and state sales taxes on purchases by Tennessee residents.