When compared to other states in the US, Tennessee is renowned for having low tax rates. The state’s 7% sales tax rate is higher than the 6% average for the country. However, some goods in Tennessee are exempt from paying sales tax. In this post, we’ll look at the things that Tennessee doesn’t tax and address some associated tax queries. Items Exempt from Tennessee Sales Tax
1. Prescription Drugs – Tennessee does not charge sales tax on prescription drugs. This covers any drug that has been recommended by a qualified healthcare provider.
2. Groceries – In Tennessee, groceries are exempt from sales tax. This includes unprepared food items including fruits, vegetables, meat, and dairy goods. Sales tax, however, applies to prepared goods like restaurant meals.
3. Medical Equipment – In Tennessee, items like wheelchairs, hearing aids, and prosthetic limbs are free from sales tax. 4. Agricultural products – Tennessee does not charge sales tax on agricultural products like fertilizer, seed, and pesticides.
Tennessee Sales Tax 2021
Tennessee levies a 7% sales tax, which is composed of a 5% state tax and a 2% municipal tax. However, additional municipal taxes may be levied in some counties and towns, raising the overall sales tax rate. Who Pays More Taxes, an LLC or a S Corporation?
It depends on a number of variables, including the business structure, profits, and deductions, whether an LLC or S Corp pays more taxes. An S Corp is typically viewed as being more tax-efficient than an LLC. This is due to a special tax benefit offered by S Corps known as “pass-through taxation,” which enables the income of the business owner to be taxed at the individual tax rate rather than the corporate tax rate. If I Own a S Corp, Am I Considered Self-Employed?
No, having a S Corp does not equate to becoming your own boss. S Corp owners are regarded as corporate employees, and as such, they are paid a salary and are responsible for paying taxes on that income. But in addition to their salary income, S Corp owners may also get a cut of the company’s earnings, which are taxed differently. Does an LLC receive a 1099?
Undoubtedly, an LLC does not get a 1099. Instead, a K-1 form outlining each LLC owner’s portion of the company’s gains and losses is given to them. In their personal tax return, the owner(s) then disclose this information. However, if an LLC pays vendors or independent contractors more than $600 in a tax year, the LLC may issue 1099 forms to those individuals.
In conclusion, Tennessee has a 7% sales tax rate, although a few things are exempt from it, including prescription pharmaceuticals, groceries, medical equipment, agricultural goods, and nonprofit purchases. There are a number of variables that determine whether an LLC or S Corp pays more taxes, and holding a S Corp does not make you a self-employed person. In addition, an LLC does not receive a 1099 form; instead, its owner(s) receive a K-1 form.