Hall income tax repeal fails again — but higher exemptions approved

There have been repeated efforts to repeal the Hall income tax and, once again, they failed this year. Here’s the GOP release on the alternative to a full repeal that did win approval in the last hours of legislating:

News release from Senate Republican Caucus:
NASHVILLE, Tenn. (April 23, 2015) — The Senate has approved legislation, sponsored by Senator Doug Overbey (R-Maryville), which raises the Hall Income Tax exemption level for citizens over the age of 55 to allow more senior citizens to qualify tax relief. The action on the legislation came as the Tennessee General Assembly adjourned the 2015 legislative session on Wednesday.

The Hall Income Tax levies six percent on earnings from stocks and bonds, with 3/8 of the revenue going to cities and counties.

“The use of investment savings has grown tremendously as a primary source of retirement income since the Hall Tax was enacted in 1929,” said Senator Overbey. “This bill raises the exemption level so more seniors can qualify for tax relief as the General Assembly continues to make progress in providing Hall Tax relief to Tennessee citizens.”

The legislature voted to raise the level which allows more senior citizens to be exempt in 2011 and 2013, with current income exemption levels at $33,000 per individual and $59,000 per couple. Under Senate Bill 32, the annual Hall Income Tax standard income exemption for taxpayers 65 years of age or older would be $37,000 for single filers and $68,000 for joint filer taxpayers beginning in January 2016.

Of the individuals who pay the tax, Overbey said almost half are age 65 and older.

“The increase in the income exemption will make the state more competitive in attracting retirees,” added Overbey. “I am pleased this legislation has been passed by the General Assembly and was funded in this year’s budget.”

The bill now goes to Governor Bill Haslam for his signature.