Today, the administration presented to leadership a proposal to eliminate the state sales tax "single article cap".
Currently, the first $1,600 of any single item taxable purchase is subject to the combined state (7%) and local option sales tax (up to 2.75%). The next $1,600 of a purchase is taxed at 9.75% with all of the revenue going to the state. The value of a purchase that exceeds $3,200 is subject to the state rate of 7%.
The administration now wants to remove this $3,200 cap so that everything above $1,600 is taxed at 9.75%. Exceptions would remain for cars, boats, and manufacturing equipment.
Regardless of how the administration will try to spin this, it is an $85 million tax increase on Tennesseans!
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