Gov. Haslam weighs joining effort to eliminate state's gift tax

Gov. Haslam weighs joining effort to eliminate state's gift tax

April 18th, 2012 by Andy Sher in Local - Breaking News

Republican Gov. Bill Haslam is pictured in this file photo. (Photo by Wade Payne, Special to the News Sentinel)

Republican Gov. Bill Haslam is pictured in this...

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

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

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

"And we're not not typically in Connecticut's neighborhood when it comes to tax policy," the governor 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. It applies graduated taxes from 5.5 percent to 16 percent, on gifts to family members of $13,000 or more. The tax affects ifts to persons other than family members 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, which could come up in the Finance Committee later today.

Haslam and top Republican lawmakers are already 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 2012-2013 budget, which lawmakers are expected to act on later this month.