Wed
Feb 10 2010
04:56 pm
State sales tax revenues for January "disappointing"
By: R. Neal

January Revenues:

Negative growth in sales tax collections continued in January, with overall January revenues coming in at $947.4 million, which is $16.1 million less than the state budgeted.

"January is the 20th consecutive month in which sales taxes have recorded negative growth." Finance and Administration Commissioner Dave Goetz said. "January collections represent December holiday sales, which brought reports of positive growth at the national level, so it’s very disappointing that we didn't have a similar experience in Tennessee."

As the former Bill Hobbs liked to remind us, sales taxes are voluntary taxes, so the state's taxpayers are just giving themselves a tax cut. Whatever.

Topics:
Andy Axel's picture

Predictable result: People

Submitted by Andy Axel on Thu, 2010/02/11 - 10:20am.

Predictable result: People are shopping online or out of state for necessary purchases.

TN: 7-9.75% (groceries 5.5%)

GA: 4-7% (groceries exempt)
KY: 6% (groceries exempt)
MS: 7%
AL: 4-10% (groceries not exempt)
AR: 6-7% (groceries 2%)
NC: 7.75% (groceries 2%)
VA: 5% (groceries 2.5%)

I spend a lot of weekends in Kentucky. The 6% savings on the grocery bill is substantial over time.

How long before we start selling state assets on eBay, a la Colorado Springs, to raise money?

Tamara Shepherd's picture

Aren't you saving 8.25% to 8.75% on the grocery bill?

Submitted by Tamara Shepherd on Thu, 2010/02/11 - 5:58pm.

I spend a lot of weekends in Kentucky. The 6% savings on the grocery bill is substantial over time.

Since KY charges no sales tax at all on groceries, you're really saving 8.25% (or more) on the grocery bill, aren't you?

Including their local option sales taxes on food, TN counties charge 8.25% to 8.75% total sales tax on food.

(Or are you possibly saying that the state of KY doesn't apply their sales tax to food, but that some KY counties apply just their local option sales tax to those purchases?)

Andy Axel's picture

I didn't think about it when

Submitted by Andy Axel on Thu, 2010/02/11 - 9:41pm.

I didn't think about it when I wrote it; I was just thinking 6% versus 9.25%. So yes, my savings on unprepared food is more like 8% (if i'm not netting fuel cost).

Actually, the savings might be even more since the cost basis in the same grocery store chain in Nashville (Kroger) is actually lower for some items in Hopkinsville or Murray.

bizgrrl's picture

I guess to fix the sales tax

Submitted by bizgrrl on Fri, 2010/02/12 - 5:14am.

I guess to fix the sales tax disparity between states, TN can institute an income tax and modify sales tax rates to be more in line with surrounding states.

Tamara Shepherd's picture

TN adjacent to 8 states

Submitted by Tamara Shepherd on Fri, 2010/02/12 - 10:15am.

I've read TN suffers more "sales tax leakage," a term used to describe this phenomenon of out-of-state shopping, than any state in the US.

It's because we share a state boundry with more states than any other state.

We're a "long, skinny" state, adjacent to eight others.

redmondkr's picture

We can soon expect troopers

Submitted by redmondkr on Fri, 2010/02/12 - 10:30am.

We can soon expect troopers posted at state lines nabbing these celery smuggling miscreants.

I used to ride to Jellico with a friend when he bought lottery tickets at a little market that was barely in Kentucky. He had cash from several of his coworkers and always came back with a pile of tickets. We rode up there last summer to visit with old friends and discovered that the market had closed.

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