Tennessee has recently been in some serious budget trouble. Consequently, the Tennessee legislature proposed a special session meeting. As a result, effective July 15, 2002, the state Sales and Use tax rate is increasing from 6% to 7%. The new state rate does not, however, apply to food and food ingredients further described in the bill. These remain taxable at the previous 6% rate. The increased state rate also applies to all telecommunications charges that are currently subject to sales tax except interstate telecommunication services, which remain taxable at 7.5%. Additionally, the tax cap that applies at the local level has been modified. Currently the taxable single article cap limit is $1,600 of the purchase amount for tangible personal property. Effective July 15, 2002 this amount changes to $3,200. Amounts ranging from $0.01 to $1600 are taxable at the applicable local rates. Amounts ranging from $1600.01 to $3200 will now be levied an additional state rate of 2.75%, regardless of the local rate in the applicable jurisdiction. This summary is not a complete listing and does not fully represent all amendments made. (Bill No. 3110, July 9, 2002, Special Session, Laws 2002)