Robin SmithLast week, a few mayors and Tennessee state legislators, a group of think tank leaders and a contingent of press met in a room at Tennessee’s Legislative Plaza to mark the “beginning of the end of Tennessee’s income tax.”
The Beacon Center of Tennessee, a nonprofit, nonpartisan policy research organization, kicked off the press conference with President Justin Owen noting the purpose of the gathering: to launch a legislative effort to end the state’s Hall Tax, a tax on personal investment income.
The Hall Tax was initiated in 1929 and ruled by Tennessee’s Supreme Court to be a “privilege tax” to avoid conflict with our state’s constitution that prohibits an income tax. Yet, the Hall Tax, levied on the income an individual receives from the interest from savings and dividends resulting from mutual fund and stock investments, is truly a personal income tax.
Doubt that? Go to the state’s online portal to file your payment electronically, and you’re greeted with the banner from the Department of Revenue, “Individual Income Tax.”
Joining the Beacon Center were the legislative sponsors who have written the bill to gradually end the Hall Tax over a 6-to-7-year window of time. State Sen. Mark Green, R-Clarksville, and Rep. Charles Sargent, R-Brentwood, discussed the bill that would begin upon passage to reduce the current rate of 6 percent taxation on taxable interest and dividend income over $1,250 per person ($2,500 for married couples filing jointly) for those under age 65.