Tennessee Tax Law: All You Need To Know

 In Law, Tax Law

Indeed, no one enjoys paying taxes, but they are unavoidable due to the stringent laws on taxes. The importance of taxes is underlined by the fact that they assist in funding public services such as the construction of roads, public schools, and other public amenities that the Tennessee citizens depend on.  Navigating through the tax laws and procedures may be a difficult task. Therefore, you need to understand Tennessee tax law.

Here is a detailed elucidation on all you need to know about Tennessee tax laws and how a qualified tax law attorney can help you.

Tennessee Consumer Taxes

In Tennessee, the charges on consumer purchases are controlled by state consumer tax laws. In this case, the nature of the goods essentially determines the amount of tax to be charged. This means that if you are handling essential goods, they are likely to have a lower tax charge than non-essential goods, which are normally higher.

The consumer tax laws include:

  • Sales tax
  •  Cigarette tax
  •  Gasoline tax
  •  Use tax
  •  Liquor tax
  •  Gambling tax

When it comes to goods or services brought into the state by an out-of-state vendor, you will be required to pay a ‘use tax.’ This applies where the out-of-state vendor fails to charge their own state sales tax.

Tennessee Probate & Estate Tax Laws

When a person dies, his or her estate is to be distributed in accordance with the law. An estate means the deceased money or property, which is to be divided to the heirs or co-owners. Therefore, probate and estate tax laws are applied to the estate of a deceased.

Estate tax

The provision governing this is found under:

  • Tennessee code title 30: provides for the administration of Estate
  • Code title 31: provides for descent and distribution
  • Code title 32: provides for wills
  • TN Code title 35: provides for Fiduciaries and Trust estates.

Probate matters in Tennessee are complicated, and you may find it difficult to navigate through the tiresome processes. Also, Tennessee courts restrict an executor or administrator of an estate to be self-represented. Therefore, you may find it imperative to consult a private attorney to assist you in legal representation.

Additionally, apart from representing you, an attorney guides you in determining what assets require probate and what assets can avoid probate. Normally, this can be a difficult undertaking for non-specialists but may end up being easier where you have an attorney by your side.

Tennessee Personal Income Tax Laws

It is codified under code section 67-2-101. It is worth noting that the jurisdiction in Tennessee lacks personal income tax. Instead of this, the state levies what is termed “hall tax” on earned interest and dividends. Hall tax works similar to general income tax. This means that any person under 65 years who has received interest or dividends must file a return with the state. This is different for persons who are 65 years or older earning a total annual income below $33,000 who are exempted from paying the hall taxes.

Tennessee Tax Fraud and Tax Evasion Laws

Tax fraud denotes a deliberate attempt to evade taxes. This can be done intentionally or where you underway your taxes.  The commission of tax fraud is denoted as both a criminal and a civil wrong. Therefore, persons who are found culpable are liable to penalties. Tennessee code section 67-2-121 provides for the crime of tax evasion. This provision makes it a class C misdemeanor crime for a person who fails to file a tax return and in cases where you violate any tax regulations. In this case, you may end up serving 30 days in jail and a $50 fine. Also, making a false return contrary to tax regulations is categorized as a Class E felony in which a person may end up serving jail time ranging from 1-6 years and a fine of up to $3,000.

Navigating through the Tennessee tax law may be a difficult task. Therefore, consulting a tax law attorney may prove to be an imperative undertaking. Contact us today to help you with your tax issues.