Take Advantage of the Tennessee Sales Tax Holidays and Save Money

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PHB is one of the premier CPA firms Nashville residents and business owners look to for advice about saving money on taxes. Well, there is one simple way you can save money on taxes in Tennessee. And you don’t even need an appointment with us to file any kind of tax form! But, of course, we are always here for you when you do need tax advice. PHB is well known for doing  business taxes in Nashville and the surrounding areas.

Obviously, if you read the title of this blog, you know that we are talking about the Tennessee Sales Tax Holidays. There are three of them:

Clothing, School Supplies, and Computers – Starts one minute after midnight on Friday, July 30, 2021 and ends one minute before midnight on Sunday, August 1, 2021.

Food, Food Ingredients & Prepared Food – Starts one minute after midnight on Friday, July 30, 2021 and ends one minute before midnight on Monday, August 5, 2021.

Gun Safes & Safety Equipment – Started on July 1, 2021 and continues for 12 months until one minute before midnight on Thursday, June 30, 2022.

Some Restrictions Apply for the Tennessee Sales Tax Holidays

Items purchased from retailers in Tennessee or from online sources that deliver the items to Tennessee are eligible. However, they must be for personal use, not for business or trade. There is no limit to the quantity of items that may be purchased. But the purchase price of each of those items must be below the threshold provided in the law.

Items that Are Eligible for Tax-Free Purchase During the Tennessee Sales Tax Holidays

Below we list both the tax-exempt items and items that are not tax-exempt for each of the three tax holidays.

Clothing, School Supplies, and Computers – July 30 – August 1, 2021

Clothing

  • Exempt: General apparel that costs $100 or less per item, such as shirts, pants, socks, shoes, dresses, etc.
  • Not exempt: Apparel items priced at more than $100; Items sold together, such as shoes, cannot be split up to stay beneath the $100 maximum; Items such as jewelry, handbags, or sports and recreational equipment

School Supplies

  • Exempt: School and art supplies with a purchase price of $100 or less per item, such as binders, backpacks, crayons, paper, pens, pencils, and rulers, and art supplies such as glazes, clay, paints, drawing pads, and artist paintbrushes
  • Not exempt: School and art supplies individually priced at more than $100; Items that are normally sold together cannot be split up to stay beneath the $100 maximum

Computers

  • Exempt: Computers for personal use with a purchase price of $1,500 or less; Laptop computers, if priced at $1,500 or less, also qualify as well as tablet computers
  • Not exempt: Storage media, like flash drives and compact discs; Individually purchased software; Printer supplies; Household appliances

Food, Food Ingredients & Prepared Food – July 30 – August 5, 2021

Food and Food Ingredients

  • Exempt: Liquid, concentrated, solid, frozen, dried, or dehydrated food or beverages for human consumption
  • Not exempt: Alcoholic beverages, tobacco, candy, dietary supplements

Prepared Food

  • Exempt: Food that is sold in a heated state or heated by the seller. Food that contains two or more food ingredients mixed together by the seller for sale as a single item. Food that is sold with eating utensils, such as plates, knives, forks, spoons, glasses, cups, napkins, or straws provided by the vendor.
  • Not Exempt: Food that is only cut, repackaged, or pasteurized by the seller

Gun Safes and Safety Equipment – July 1, 2021 – June 30, 2022

Gun Safes

  • Exempt: A locking container or other enclosure equipped with a padlock, key lock, combination lock, or other locking device that is designed and intended for the secure storage of one or more firearms.

Safety Equipment

  • Exempt: any integral device to be equipped or installed on a firearm that permits the user to program the firearm to operate only for specified persons designated by the user through computerized locking devices or other means integral to and permanently part of the firearm.

 

 

It’s Not Too Late for Tax Planning for 2021 Even Though Half the Year Is Almost Gone

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Whether you are filing as a corporation, partnership, LLC, or individual, you can benefit from doing some tax planning now. You must do some tax savings strategies for businesses, like timing income and expenses, before the end of the tax year. But you can do others any time before you file your return. So, you still have time. The tax professionals at PHB CPAs can advise you on various ways to reduce your tax bill for 2021.

6 Tax-Saving Tips for Businesses

The following tips are not intended to be tax advice. They are suggested topics you can discuss with your tax expert at PHB. Remember, for expert advice on business taxes Nashville turn to PHB.

    1. Apply for PPP forgiveness. Read more about this in our blog Applying for Forgiveness for PPP First Draw.
    2. Set up and fund a retirement plan. This can be for yourself or for your employees. Make sure it’s a qualified plan the IRS recognizes (IRA, 401(k), 403 (b), etc.). This will allow you to defer taxes on earnings until you withdraw the earnings.
    3. Take tax credits to lower income. This includes credits for hiring employees, going green, providing access for the disabled, and providing health coverage for employees.
    4. Take 100% Deduction for Business Meals. See our blog PHB Explains the 100% Deduction for Business Meals for details on this.
    5. Buy equipment/vehicles for depreciation deductions. For certain assets that you purchase, you can take an immediate deduction for the cost when you put it in service. The Tax Cuts and Jobs Act also allows for a 100% tax break for assets placed in service from September 27, 2017 through January 1, 2023.
    6. Time your business income and expenses: This involves prepaying some expenses to reduce your income for the year. For example, you could stock up on supplies that you know you will use in the next tax year.

The Benefit of a Year-end Tax Planning Meeting

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