Bill Haslam
Tennessee Gov. Bill Haslam had a ceremonial bill signing for a reduction in the Hall Income tax for senior citizens on Tuesday, a press release said.
Haslam signed the legislation during a visit to Crossville. It’s the second piece of legislation cutting taxes in the governor’s 2013 legislative agenda, the press release said.
The release said the bill, HB 192/SB 198, raises the exemption level of the tax to single filers 65 years old with an income of less than $33,000 and to joint filers with at least one spouse at least 65 years old with an income of less than $59,000.
Previously, single filers at least 65 years old with an income of less than $26,200 and joint filers with at least one spouse at least 65 years old with an income of less than $37,000 were exempt from the Hall Income tax.
The new legislation is effective January 1, 2013 for tax purposes.
“Tennessee is ranked No. 1 among all states by bankrate.com as the best state for retirement,” Haslam said. “By managing the state budget conservatively and focusing on making state government more efficient and effective, we’ve been able to cut taxes while continuing to make strategic investments and balancing the budget. I want to thank the General Assembly for passing this sensible legislation that makes Tennessee an even more attractive state to live.”
The release said the bill was sponsored by Senate Majority Leader Mark Norris, a Collierville Republican; House Majority Leader Gerald McCormick, a Chattanooga Republican; and state Rep. Cameron Sexton, a Crossville Republican. In his first year in office, Haslam signed legislation that lifted the exemption from $16,200 to $26,200 for single filers and $27,000 to $37,000 for joint filers.
Taken together, the bills passed in 2011 and 2013 have doubled the income level at which senior citizens remain exempt from the Hall Income tax, the press release said.
“Through two-and-a-half years in office, Haslam has signed legislation cutting the grocery tax on food, the Hall Income tax, the inheritance tax and the gift tax,” the release said.
David A. Vudragovich says
So what is the tax rate for the rest of us on this Hall Income Tax?
I remember last year when they raised the inheritance tax…er…I thought it was estate tax exemption.
johnhuotari says
I’ll have to do some research on that, David.
David A. Vudragovich says
Being in insurance, I know the Federal estate tax does apply to the first $1 million of your estate (temporarily at $5 million) and last year (2012) the state of TN raised its exclusion from $1 million to $1.25 million. Not sure if that affects the tax rate or just over all taxes paid. But a good reason to sit with your Local Insurance Agent and make sure you have enough insurance to keep your estate whole for your heirs.
Ellen Smith says
The Hall income tax is a 6% tax on interest and dividend income. For those of us under 65, the first $1250 for a single filer — or the first $2500 for joint filers — is exempt.
Philip W Nipper says
Ellen, the tax is imposed only on individuals and other entities receiving interest from bonds and notes and dividends from stock. Not from normal interest income from savings accounts, CDs, etc
Ellen Smith says
You’re correct in pointing out that the Hall income tax doesn’t apply to interest paid by commercial banks, Philip, but it does apply to dividends and interest from mutual funds and other investments that many individuals may own.
I’m sorry if you found my comment misleading — I was merely responding to David’s question about the interest rate, not trying to write an entire article about this tax!
David A. Vudragovich says
Thank you, someone had told me that before…I am sure I would remember if it was called a “dividend tax”!
Now I have to go talk with my accountant about if you are a small business owner (aka s corp, no employees) if you pay yourself a dividend, instead of taking money out as salary, if the Halls tax kicks in. Still, it is less than paying both side of SS.