MEMPHIS, TN – Many times Tennesseans feel like they get dumped on- finishing near the bottom of various national rankings. In one of the latest polls, Tennessee is number one -- when it comes to highest sales tax.
17-year-old student Jasamine Smothers said, “I don’t see why Tennessee should have the highest sales tax.” She's studying state tax policies in school.
Most Tennesseans would probably agree. A new Tax Foundation study shows Tennessee leads the nation with a sales tax of nearly nine and a half percent.
“This is the price tag for the government services people want,” Scott Denkard, Tax Foundation economist told abc24.com. “One of the things you have to remember in Tennessee is no individual state income tax.”
Smothers said, “I guess since we don’t have income tax they feel they need to take it out some other kind of way. But, if that’s the case- don’t make our taxes super high.”
“I’ve always said it’s regressive,” Memphis Mayor A C Wharton said of sales taxes. “The poor pay exactly the same tax on their groceries that I pay.”
Denkard told abc24.com, “Sales tax does affect everybody, but it’s not as destructive as other taxes. I think an income tax is probably going to be more destructive.”
And of course, it is important to be aware of your surroundings.
“You still have to compete with your neighbors.” Denkard said.
Sometimes those neighbors, while in other states- are very close; and tax research shows they have lower sales tax.
Southtown Center in Southaven, Mississippi, is a very busy area for commerce. Shoppers there pay seven percent sales tax, while just a couple miles north, they pay two and a half percent more.
“To be honest, I really don’t pay attention to sales tax,” said Mississippi resident Angela Riley.
However, many people do.
A check of the parking lot on a recent weekday afternoon revealed many cars with Tennessee plates.
While Tennessee is number one in sales tax, Arizona- the only other state over nine percent, along with Louisiana, complete the top three. Washington and Oklahoma round out the top five; Arkansas is number six at 8.58 percent.
Mississippi ranks 19th in sales tax rates, while two other states that touch Tennessee- Kentucky and Virginia- rank 36th and 43rd.
