Gov. Bill Haslam backs bill to end gift tax

Gov. Bill Haslam backs bill to end gift tax

April 19th, 2012 by Andy Sher in Business Around the Region

Tennessee Gov. Bill Haslam

Tennessee Gov. Bill Haslam

Photo by Associated Press /Times Free Press.

NASHVILLE - Gov. Bill Haslam says he may go along with GOP lawmakers' effort to eliminate the state's tax on gifts.

"I think there are a lot of things to be worked out here in the last couple of weeks," the Republican governor told reporters Wednesday. "I think it's something that all of us look at."

Haslam noted that Tennessee and Connecticut are the only states that apply taxes to large gifts.

"And we're not typically in Connecticut's neighborhood when it comes to tax policy," Haslam said. "So I think all of us can say that's probably not something that Tennessee wants to have."

House Speaker Beth Harwell, R-Nashville, and House Finance Chairman Charles Sargent, R-Franklin, have a bill to eliminate the gift tax.

The tax currently applies graduated taxes from 5.5 percent to 16 percent on gifts to family members of $13,000 or more. The tax affects gifts to people other than family member's gifts to others of $3,000 or more.

Eliminating the tax would result in a $14.9 million annual revenue loss to the state.

Senate Finance Committee Chairman Randy McNally, R-Oak Ridge, has the Senate companion bill.

Haslam and top Republican lawmakers already are moving to phase out the state's inheritance tax with a first installment expected to cost the state treasury $14.1 million in the proposed 2012-13 budget.