Just tax home sales?
Food Tax Sends Tenn. Shoppers Out of State By BILL POOVEY, Associated Press Writer
Mon Dec 26, 4:34 AM ET
CHATTANOOGA, Tenn. - When Julie Abel goes grocery shopping each week, she drives more than 25 miles to Georgia to avoid paying the nation's highest average tax on food: 8.4 percent in Tennessee.
"If you can save $5 it is worth driving down the road," Abel said after traveling from her rural home in Hamilton County, which collects 2.22 percent sales tax on food on top of the 6 percent for the state. Georgia does not tax food sales.
Abel is not alone in her frustration. Rep. Michael Kernell, D-Memphis, said he regularly hears complaints about the state's almost 60-year-old food tax and he predicted it would change.
"A lot of people can't believe it," he said. "People are leaving the state to buy groceries."
Chris Daly, chairman of Tennesseans for Fair Taxation, wants to end the state's tax on food because he said it victimizes low and middle income people.
An "average family of four could eat for free from Thanksgiving to Christmas on the tax they pay on food in a year," Daly said.
A recent report from Daly's group shows Tennessee leads the nation with the highest average sales tax on food, 8.4 percent, and a 9.4 percent sales tax.
Tennessee is among nine states that either have no state income tax, or collect it on dividend and interest income. Some say a state income tax could help ease the burden of the tax on food.
Gov. Phil Bredesen has said that if re-elected next year he will not support a state income tax. Bredesen spokeswoman Lydia Lenker said the Democratic governor has shown that state government "can operate within its means."
Bredesen's state finance commissioner, Dave Goetz, said the report that shows the state has the highest average tax on food is no reason to change the tax system.
"The people in Tennessee have been clear they are comfortable with the tax system we have," Goetz said. "While it may seem high to some, apparently most people don't feel it's a real problem."
Another report by Tennesseans for Fair Taxation shows average sales taxes on food in states that border Tennessee range from no tax in Kentucky to 8 percent in both Alabama and Arkansas.
In Alabama, a spokesman for Montgomery-based Alabama Arise, an advocacy group for the poor, said there is an ongoing effort to eliminate or at least reduce the tax on food.
"We are taxing the poor on the necessities of life and that is something most states avoid. But we are doing it with pride," said Alabama Arise director Kimble Forrister.
Carolyn Denison, 71, of suburban Chattanooga, said she frequently drives across the state line to shop but thinks Tennesseans would oppose replacing the sales tax on food with an income tax "because they just see it as another tax."
"I don't think it is as fair as an income tax," Denison, a retired public school teacher, said of the tax on food.
AARP Tennessee and some advocates for the poor, such as the anti-hunger group MANNA in Nashville, will continue to push to end the tax on food, which accounted for $443.1 million, or 4.6 percent of all state taxes collected by the state in fiscal 2005.
Brian McGuire, legislative liaison for the 615,000-member AARP Tennessee, said "clearly the food tax represents absolutely the worst aspect of Tennessee's revenue system." |
