Best Of Tax In Tennessee 2023

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Tax in Tennessee: Everything You Need to Know in 2023

Introduction

Tennessee is a state located in the southeastern region of the United States. It is known for its vibrant music scene, scenic beauty, and low cost of living. However, one aspect of living in Tennessee that can be confusing for both residents and newcomers is the state's tax laws. In this article, we will provide you with a comprehensive guide to taxes in Tennessee in 2023.

Overview of Tennessee Taxes

Tennessee is one of the nine states in the U.S. that does not have a state income tax. However, the state has a sales tax of 7%, which is one of the highest in the country. The state also has a franchise and excise tax for businesses, a property tax, and a hall income tax on interest and dividend income.

Sales Tax in Tennessee

The sales tax in Tennessee is 7%, which is applied to the sale of tangible personal property, certain services, and some digital products. Local governments in Tennessee also have the option to impose an additional local sales tax, which can range from 1.5% to 2.75%. Tennessee does not have a tax on groceries, prescription drugs, or over-the-counter medications.

Franchise and Excise Tax

The franchise and excise tax in Tennessee is levied on businesses that operate in the state. The tax is based on a company's net earnings or net worth, whichever is greater. The franchise tax is levied on the privilege of doing business in Tennessee, while the excise tax is levied on the privilege of using or owning property in the state. The tax rates for franchise and excise taxes vary depending on the type of business and the amount of income earned.

Property Tax

The property tax in Tennessee is based on the assessed value of real and personal property. The state sets the assessment ratio at 25% of the appraised value of the property. The tax rate for property tax varies depending on the local government where the property is located. Property owners in Tennessee have the option to appeal the assessed value of their property if they believe it is too high.

Hall Income Tax

The hall income tax in Tennessee is applied to interest and dividend income that exceeds certain thresholds. For tax year 2023, the tax rate for the hall income tax is set at 3%. The threshold for single filers is $1,250, and for joint filers, it is $2,500. Senior citizens with a total income of $37,000 or less (single) or $68,000 or less (joint) are exempt from the hall income tax.

Business Taxes in Tennessee

In addition to the franchise and excise tax, businesses in Tennessee may be subject to other taxes, such as the business tax and the gross receipts tax. The business tax is based on a company's net earnings, while the gross receipts tax is based on the total revenue earned by the business.

Tax Credits and Exemptions in Tennessee

Tennessee offers several tax credits and exemptions to individuals and businesses. For example, the state offers a tax credit for donations made to certain charitable organizations, a tax credit for the purchase of qualified energy-efficient products, and an exemption for certain types of manufacturing equipment.

Filing and Payment Deadlines

The deadline for filing state income tax returns in Tennessee is April 15th of each year. However, since Tennessee does not have a state income tax, this deadline does not apply. The deadline for filing the hall income tax is June 15th of each year. The deadline for paying property taxes varies depending on the local government where the property is located.

Taxpayer Resources in Tennessee

The Tennessee Department of Revenue is responsible for administering and enforcing the state's tax laws. The department offers several resources for taxpayers, including online filing and payment options, tax forms and publications, and a taxpayer hotline.

Conclusion

In conclusion, understanding the tax laws in Tennessee can be complicated, but it is essential for both residents and businesses in the state. We hope that this guide has provided you with a helpful overview of taxes in Tennessee in 2023. If you have any questions or need further assistance, we recommend contacting a tax professional or the Tennessee Department of Revenue.

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