White County’s tax burden among lowest in the state
By Sparta Live | April 15, 2019 8:16 am
By Rachel Auberger
In a recent study released by SmartAsset to calculate tax burdens in the state of Tennessee, White County ranked among the lowest, with only six of the state’s 95 counties having a slightly better ranking.
SmartAsset is a financial technology company that aims to provide the best personal finance advice on the web. They offer free and personalized tools to empower consumers to make smart personal finance decisions around homebuying, retirement, and taxes among other things.
Recently, the financial company conducted and released its fifth annual study calculating the average amount residents pay in income, sales, property, and fuel taxes. It compared these rates to determine the tax burden for each county across the state. The study found that White County residents had a relatively low burden coming in seventh lowest in the state, with an index number of 84.24 (a number of 100 would mean that no tax was being paid at all). Van Buren County slightly bettered their neighboring county, with an index number of 84.25, while Putnam County was ranked 81st, with an index number of 79.03, and Cumberland County was 20th, with an index number of 83.60.
While Tennessee has no state income tax on salaries, wages, bonuses, or any other type of income-for-work, the state does have the “Hall Income Tax,” named after the Tennessee state senator who sponsored the legislation, in 1929. The Hall income is a 3 percent tax for the 2018 tax year that applies only to earnings from interest and investment dividends. A taxpayer’s first $1,250 in interest or dividend income is exempt from the tax (the exemption is $2,500 for joint filers), so only people earning more than that must pay the 3 percent rate. Furthermore, seniors and the blind earning less than $37,000 are fully exempt. The good news for Tennesseans is that the Hall Income Tax is being phased out and will decrease 1 percent every year until it reaches 0 percent. The final tax year with the tax will be 2020.
Sales tax, on the other hand, is the largest part of the tax burden for Tennesseans. The statewide base sales tax in Tennessee is 7 percent, which, by itself, is the second-highest statewide rate in the nation, with only Louisiana having a higher statewide base. Cities and counties within the state can collect additional sales tax. White County’s local rate totals 2.25 percent, creating an overall tax rate of 9.25 percent, which is still among the lowest in the state, with only five counties having a lower rate and each of the surrounding counties having a higher rate of 2.75 percent.
Homeowners in Tennessee pay some of the lowest property taxes in the country. The average Tennessee homeowner pays just 0.74 percent of the home’s market value in taxes annually. This is the 13th lowest effective rate in the U.S. White County homeowners pay significantly less that the state average, with a rate of just 0.52 percent of the assessed value of a home being paid.
The Tennessee gas tax is equal to 26.4 cents per gallon of regular gasoline (21st lowest in the country), or 25.4 cents per gallon of diesel (19th lowest in the country). Of course, consumers still have to pay the high sales tax on top of the gasoline tax. With White County having a lower sales tax than surrounding counties, however, it lowers the burden by a few cents.