As the home of whiskey and country music, Tennessee has a lot to offer. It is a great place to raise a family, with low property taxes and free community college for all students. However, there are many other fees and taxes that must be paid in order to maintain local government services and infrastructure. The state’s lack of an income tax has come at a price, with a heavy reliance on sales and excise taxes to fund the state and local governments.
The average county property tax levy in 2023 was $839 per Tennessean, with rates ranging from $202 in Gibson to $2,150 in Davidson (see Figure 18). The state sales tax is 7 percent, and the local option is an additional rate varying by jurisdiction. The Tennessee Department of Revenue provides a helpful sales tax map and an online database of local options and rates. If you are looking for a skilled tax levy lawyer, check out Defense Tax Partners website at https://www.tennesseetaxattorney.net/tax-levy-lawyer/ for guidance and Free Consultation!
In addition to sales and property taxes, Tennessee’s residents pay a variety of excise taxes. The cigarette excise tax is $0.62 per pack, and gasoline taxes are 26 cents a gallon plus the local option. The state also imposes an occupation tax, which is a 3% rate on income earned from certain professions, such as real estate agents and attorneys.
Other major state and local tax sources include excise taxes on alcohol and fuel, business license and permit fees, and motor vehicle registration and renewal fees. Tennessee’s tax structure is relatively balanced, with only a small percentage of its revenue coming from business taxes.
The Tennessee Department of Revenue uses a variety of collection techniques to collect taxes that are delinquent, including sending notices and placing liens on assets. If a taxpayer does not respond to collection actions, the state may file suit in superior court.
In general, the state will send a series of notices before taking any action to collect tax debt. The first is a notice of proposed assessment, followed by a demand for payment and an informal conference. If the debt is not resolved after these efforts, the state will place a lien on the debtor’s assets and proceed to filing suit in state court.
A good tax attorney will be able to help the client with the state’s collection process and negotiate a more reasonable settlement. In some cases, the attorney can obtain an installment agreement or an offer in compromise with the state. The offer in compromise is a settlement for less than the total amount of the tax debt, and the client must meet specific criteria to qualify.
A good Tennessee tax lawyer will be able to advise clients about the various methods used by the state and local governments to collect taxes. They will understand the ins and outs of Tennessee’s tax structure, including how the local options impact consumers and businesses. They can also help individuals and businesses negotiate with the state to avoid foreclosure and other negative consequences of delinquent tax debt.