Metro Pulse/Cover/Tennessee Sales Tax

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Running for the Border
The sales tax hike drives dollars out of state

Border shopping may be common, but it's technically against the law

by Bill Carey

If you're thinking about making a run to the border to avoid Tennessee's high sales and use taxes, you might want to know something first: It's illegal.

There are different laws that address the importing of groceries, cigarettes, alcohol, and lottery tickets. Here are some of them:

Anything purchased outside of Tennessee for use inside the Volunteer State is technically subject to sales and use tax after it gets here. "Most people don't know this," says Department of Revenue spokeswoman Sondra Morris. "But if you went to Atlanta on a big shopping spree and brought everything home, you're supposed to pay sales taxes on that." People who bring untaxed goods into Tennessee are supposed to fill out a sales and use tax form and send a check to the Department of Revenue. The punishment for non-compliance is to pay the tax plus a penalty on top of that. Morris says the most likely situation in which people are caught trying to avoid the tax are when people or businesses make large purchases, such as furniture and computers, by Internet or mail order and the transaction turns up in an audit (through an interstate organization called the Southeast Association of Tax Administrators).

The punishment for bringing cigarettes, beer, and liquor into Tennessee is more severe and more likely to be enforced because the alleged importers are often retailers. The act of importing between two and 25 cartons of cigarettes is a misdemeanor, punishable with up to 11 months and 29 days in jail and the possible confiscation of your vehicle. (In other words, the very act of driving into Tennessee with three cartons of cigarettes with out-of-state stickers on them can cost you your car.) The importation of more than 25 cartons is a Class E felony, punishable with between one and six years in jail, plus the possible confiscation of your vehicle.

In the case of beer, the importation of up to 100 cases is a misdemeanor, and your vehicle is subject to seizure. Over 100 cases is a Class E felony.

Finally, the very act of possessing and transporting a lottery ticket in Tennessee is a violation of state law. However, this law is almost never enforced, even when Tennessee residents win well-publicized lotteries. Some legislators have talked about changing the state law to make the possession of lottery tickets legal (after all, it is perfectly legal for other states to advertise their lotteries here.) But for some reason, bills that would get rid of the anti-lottery-ticket law never make it out of committee.

Despite all these laws, there isn't much that the state of Tennessee can do about people who cross over into Kentucky, Georgia, Virginia, or any other neighboring state to take advantage of lower taxes. "It's not a priority for us," admits Beth Womack, spokeswoman for the Department of Safety, which employs Tennessee's state troopers. "Obviously, if we see someone with a truck full of cigarettes coming from that direction we will ask them some questions. But we are not going to do roadblocks or searches for things that they might have bought in other states. We are more concerned about safety on the highways."