Tennessee House votes to phase out inheritance tax, reduce sales tax

Tennessee House votes to phase out inheritance tax, reduce sales tax

April 12th, 2012 by Andy Sher in Local - Breaking News

NASHVILLE - The state House voted today to begin phasing out Tennessee's inheritance tax - often called the death tax - in 2016 and reducing the sales tax on groceries.

The inheritance tax legislation, which passed 88-8, increases to exemption for high-dollar estimates from $1 million to $1.25 million in its first year. State government would see $14.1 million less revenue as a result. When the tax is entirely eliminated, it will cost the state an estimated $94.1 million annually.

The sales tax bill passed 96-0. Both measures now move to the Senate.

Reducing the sales tax on groceries from 5.5 percent to 5.25 percent would result in a $22 million loss to the state.

Republican Gov. Bill Haslam intends to come back next year with another quarter-penny reduction, bringing it down to 5 percent at a total cost of $44 million over the two-year period.

For complete details, see tomorrow's Times Free Press.