Senator Rusty Crowe
(NASHVILLE, Tenn.), September 4, 2013 – While Washington and many states across the nation adopt higher taxes, Tennessee is doing the opposite. Our General Assembly lowered taxes for the third straight year during the 2013 legislative session. And, the beneficiaries of this tax relief includes the elderly who have saved all their life and utilize investment income to help fund their retirement; farmers who want to leave their family farm to their children; veterans, senior citizens and the disabled homeowners who need a property tax break; and everyone who purchases grocery food.
In other words, these tax relief measures cover just about everyone in Tennessee. I am also proud to point out that we did it while balancing our budget.
Tennessee’s Hall Tax was enacted in 1929 and is imposed on individuals receiving interest from bonds, notes, and stock dividends. Since enactment, the use of investment savings has grown as a primary source of retirement income. The legislation approved this year raises the Hall income tax exemption level for citizens age 65 and older from $26,200 to $33,000 for single filers and from $37,000 to $59,000 for joint filers. It builds on action taken by the General Assembly in 2011 to provide Hall tax relief for senior citizens.
Seniors who have worked hard to save their money and who have made wise investments over the years should not be penalized by taxes. Expect more action in January to provide additional Halls tax relief when the legislature reconvenes.
Senior citizens are also concerned about the ability to leave their property to their loved ones. Action taken this year raised the inheritance tax exemption level from $1.25 million to $2 million. This legislation also builds on action taken in 2012 to raise the exemption level and we are on track to eliminate this “death tax” completely by 2016.
Retirees have told us that the death tax is a key reason for them relocating outside Tennessee. It places a heavy financial burden on family businesses, especially family farms who pay taxes many, many times over to hang on to them.
On the tax relief on grocery food, we are continuing our efforts to reduce it. This year we lowered Tennessee’s tax on grocery food from 5.25% to 5.0%. Like the Halls and Inheritance tax relief, this measure builds on reductions made in 2012.
Finally, the General Assembly has continued to provide tax relief for low income seniors, veterans and the disabled by fully funding the growth of the property tax freeze program enacted in 2007. The mechanism for the Property Tax Freeze Program was added to the state’s constitution by voters in a referendum in 2006 before enactment the following year. This is the program that freezes a qualifying resident’s property tax at a base tax amount to provide relief from further increases. Currently, 23 counties and 27 cities participate in the program.
If you are wondering about Tennessee’s financial status in light of these tax relief measures — we are a triple-A rated state, and the state’s most recent bond sale was done at the lowest interest rates in recorded history. The state is ranked 48th lowest in the nation in per capita in debt and 47th in per capital tax burden.
Tennessee’s sound financial footing and reputation for being a well-managed state has also gotten the attention of the business world. The state has been named first in the Southeast for GDP, first for infrastructure, first in auto manufacturing strength, fourth in U.S. manufacturing jobs growth, and fourth in net new jobs since 2011.
We are on the right track! We must continue our efforts by managing state government conservatively, investing in priorities, avoiding debt and finding efficiencies to put more money back in the hands of taxpayers. By doing so, we will create a brighter future for the next generation of Tennesseans.