NASHVILLE, (April 19, 2016) – State Senator Brian Kelsey (R-Germantown) said today he is very pleased that legislation he is co-sponsoring to phase out the Hall Income Tax has received final approval. Senate Bill 47, which lowers the tax by one percent this year with the legislative intent to phase it out by 2021, was approved on Tuesday as the General Assembly prepares to adjourn the 2016 legislative session.
Kelsey has made repeal of the Hall Tax one of his legislative priorities for the past 6 years.
“The Hall Tax on interest and dividends discourages saving and investment and disproportionately impacts senior citizens on fixed incomes,” said Senator Kelsey. “More and more citizens are relying on interest from stocks and dividends to fund their daily living expenses when they retire. Not only is the Hall tax oppressive to these seniors, but it encourages them to move out-of-state.”
Since enactment of the Hall tax in 1929, the use of investment savings has grown as a primary source of retirement income. The current tax rate is six percent applied to all taxable interest and dividend income over $1250 per person and $2500 for married couples filing jointly.
“The Hall tax also has a negative impact on our ability to attract new jobs and is a drain upon state-wide capital liquidity,” added Sen. Kelsey. “Repealing the Hall Tax is a pro-growth move that will encourage investment and reinvestment in the State, its companies, and its people.”
The bill now goes to the House of Representatives for approval there before moving to Governor Bill Haslam for his signature.