How to Choose the Right Tax Levy Attorney for Your Case

For many people, the state of Tennessee is synonymous with bourbon whiskey and country music. However, the Volunteer State also has a lot to offer families, including no state income tax and low property taxes. Unfortunately, Tennessee’s low taxes don’t apply equally to all taxpayers. For the top 1 percent of Tennessee households, the absence of a broad-based personal income tax pays off: They pay just 2.8 percent of their income in state and local taxes—the lowest rate for this group in the nation.

But, as the economy slows down, these gains are waning. In fiscal year 2023, the Department of Revenue saw a gain in sales tax collections of 21% and an increase of 68% in franchise and excise tax collections, but the gains in these taxes were partially offset by drops in gas, fuel, and motor vehicle tax and fees collections. If you are looking for a skilled tax levy lawyer to help you with tax matters, check out Defense Tax Partners website at https://www.tennesseetaxattorney.net/tax-levy-lawyer/ for guidance and Free Consultation!

As a result, the state’s general fund revenue was down by 1.9 percent. And, while a small amount of the drop came from cuts to the general fund, most of the decline was due to a slower than expected rebound in corporate taxes.

Across the state, county property tax effort fell as a share of assessed and market value. While the property tax rates in each of the state’s three Grand Divisions tended to vary, the potential revenue generated by these rates varied widely from one county to the next (Figure 29).

In contrast, county sales and use taxes, which account for about 20 percent of local government collections in Tennessee, were relatively stable as a share of market value. In fact, county sales and use tax revenues actually increased in more than half of the state’s counties in 2023 compared to 2008.

Overall, Tennessee ranks 8th on the Institute for Taxation and Economic Policy’s “State Tax Competitiveness Index.” But the lack of a broad-based income tax comes with a price: When measured relative to personal income, the poorest 20 percent of Tennessee households pay 8.9 percent of their income in state and local taxes—the seventh highest rate in the nation.

The state’s sales taxes are among the highest in the country, with a rate of 7 percent that is supplemented by local rates. Groceries are taxed at 4 percent, while prepared food items, candy, dietary supplements, and alcoholic beverages are taxed at 7 percent. In addition to these sales taxes, Tennessee’s gasoline and cigarette excise taxes are among the highest in the nation.

If a taxpayer fails to pay their taxes, the Department of Revenue will send them a Notice of Proposed Assessment and then follow up with a Final Demand for Payment. If the taxpayer still doesn’t make a payment arrangement, the DOR may pursue collection actions such as liens and levies. However, it is possible for a person to avoid such collection actions by filing an installment agreement or making a lump sum payment. A person may also file for bankruptcy, a process that can help them deal with a debt problem by reducing their payments.