Tennessee is famous for its whiskey and music, but it’s also a great place to live and raise a family. The state’s no income tax is a big benefit for families with kids, and it offers free community college for all high school graduates. But if you’re behind on your taxes, the state can use collection actions such as property liens and bank levies to recover the money that’s owed. It’s important to keep up with your payments so that you can avoid these collection actions.
The state has a low effective property tax rate at 0.65%, which is among the lowest in the country. This means that the average Tennessee homeowner pays around $1,259 annually in property taxes. However, if you’re a senior or disabled homeowner with limited resources, the state may help you pay your property tax through the Tennessee Property Tax Relief Program. The eligibility criteria for this program includes having a total household income (including Social Security benefits) that’s no higher than $33,460. If you are looking for a skilled tax levy lawyer, check out Defense Tax Partners website at https://www.tennesseetaxattorney.net/tax-levy-lawyer/ for guidance and Free Consultation!
In addition to the state’s sales tax of 7%, local governments can charge their own rates on certain goods and services. For example, Nashville and Memphis have a 1% special sales tax on food items and beverages. The Department of Revenue website has more information about local sales tax rates.
Statewide, sales tax collections are growing rapidly, fueled by strong gains in franchise and excise tax and property tax collections. These collections are expected to grow by 8% in the current year and by about 20% in the next three years. But not every county is making the same gains.
Some counties are struggling to generate enough tax revenue for their services. In these cases, the state can send an Intent to Levy or Lien letter to the taxpayer. This is typically sent about 110 days after the Notice of Proposed Assessment, and it gives the taxpayer about two weeks to make arrangements with the DOR.
A tax levy is the government’s most serious collection action. It can include garnishing wages, taking funds in a bank account, or selling your assets. The Tennessee Taxpayer Bill of Rights says that the DOR must notify you at least ten days before beginning a levy or taking other action against your assets.
The DOR may also file an Intent to Levy against a business that’s more than five years behind on its taxes. The business owner must be notified within a month after the tax levy is filed. If the business owner doesn’t respond, the DOR can liquidate the business assets and sell them to collect the debt owed.
Taxpayers with delinquent taxes can work with the DOR to arrange a payment plan. They can also apply for an offer in compromise, which is when the DOR agrees to settle your claim for less than what you owe. The application process is complex and detailed, and you must meet specific qualifications to qualify. If you can’t afford to pay your tax liability in full, contact the DOR’s customer service department for more information about these options.
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