The sales tax holiday covers clothing and school supplies valued at $100 per item or less, and computers priced at $1,500 per item or less.
This state has the highest combined state and local sales tax rate (at 9.75 percent) in the nation. Tennessee also taxes groceries, something that is exempted in 33 other states with a sales tax.
Patchwork efforts have been made to address the problem. Earlier this year, state lawmakers agreed to reduce the sales tax on groceries by 1 percent while hiking the state’s gas tax by 4 cents.
The sales tax holiday is little more than a cruel gimmick that offers only temporary relief to a burdensome tax system, which Tennesseans for Fair Taxation says is one of the most inequitable and plainly unfair tax systems in the nation. TFT estimates a family in Johnson City making less than $22,000 a year pays more than three times the taxes as a portion of its income than families with much higher annual incomes.
Tennessee government operates on a sales tax system held hostage to the ebb and flow of the economic cycle. What good is it to remove the sales tax on food today if an economic downturn forces lawmakers to restore the very same tax in a year or two?
A more sensible approach to solving the problem of high sales taxes would be for lawmakers to reform the state’s antiquated tax system. That includes dealing with the elephant in the room — this state’s haphazard collection of taxes from online sales.