Hall Tax To Be Eliminated Over 6 Years

Friday, April 22, 2016

The Tennessee General Assembly has passed legislation to repeal the Hall Income Tax over a period of 6 years.

The tax rate will be reduced from six percent to five percent, a seventeen percent cut from the total dollars collected by the state for fiscal year 2016.

The intent of the General Assembly in successive years is that the tax on investment and dividend income will be cut one percent annually, but is not bound to any specific rate reduction being charged to respond according to the economic health of each fiscal year.

Under the bill, by Jan. 1, 2022, the Hall Income Tax will no longer be collected and eliminated as a legal means of taxation in Tennessee. It is set to sunset as the year 2021 sunsets.

Lookout Mountain, Tn., is one of the cities with wealthy residents that relied on the tax for a significant amount of its budget.

Senator Mark Green, a co-sponsor, said, “It has been an absolute honor to carry this historic bill and see it to passage.  The Hall Income Tax is a jobs-killer and we have just killed the Hall Income Tax. There will be no Hall Tax on the first day of 2022; this is as good as it gets for Tennessee seniors and for businesses who want to invest in Tennessee workers. 

“I have written a full repeal of the Hall Income Tax every year I have been in office.  With the assistance of my colleagues in the senate and the house, we have our victory.  The Hall Tax will disappear within five years.”

He said Tennessee "will soon join seven other states as completely income tax-free:  Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming."

Mark Braden, a founding member of Tennesseans for Conservative Action, stated that TCA had heard from thousands of Tennesseans in support of ending the Hall Income Tax. “Thanks to the thousands of conservatives across the state who signed our petition and pushed for a Hall Tax repeal. This phase-out is exactly the kind of conservative leadership that helps Tennessee stand above other states when it comes to recruiting businesses and families that help our communities prosper. ”

Beacon Center CEO Justin Owen said, “The vote to phase out the Hall Tax is the biggest victory for Tennessee taxpayers this session. After spending much time and energy educating the public and legislators about the pitfalls of the Hall Tax, we are ecstatic that this day has finally come. We applaud legislators for their leadership, especially the bill's sponsors, Senator Mark Green and Rep. Charles Sargent. They realized that this tax unfairly hurts senior citizens and job creators and did the right thing to repeal it. We can now celebrate a major reduction to the tax bills of many Tennesseans who are in desperate need of tax relief.
 
“More than half of the people who paid the Hall Tax make less than $75,000 per year and that just isn't fair. We are proud that Tennessee has finally lived up to its reputation as a truly income tax-free state."

The bill will now go to the governor to be signed into law.

 


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