Governor Haslam's approach to the state budget is to manage conservatively by investing in priorities that will bring a measurable return on investment to the state, replenishing reserves, avoiding debt, and finding efficiencies to put more money back in the hands of taxpayers.
What is Changing?
The Hall Tax, enacted in 1929, is a tax imposed on individuals and other entities receiving interest from bonds, notes, and stock dividends.
Seniors are far more likely to own stocks that pay dividends than other demographic groups, and many retirees rely on stock dividends for their income.
Seniors who have worked hard to save their money and who have made wise investments over the years should not be penalized by taxes.
In 2011, Governor Haslam and the General Assembly raised the Hall Tax exemption level for taxpayers age 65 and up by $10,000 for both single and joint filers.
This year, Governor Haslam is proposing to raise the exemption level again to continue to reduce the tax burden on seniors.
This year's legislation increases the Hall Tax exemption level for individuals who are 65 years and over for the tax year beginning January 1, 2013.
Single filers with a total annual income of $33,000 or less will be exempt from the Hall Tax.
Joint filers, with either spouse 65 years or over and having total annual income of $59,000 or less, will also be exempt from the Hall Tax.
Current Law Exemption Level
Proposed Law Exemption Level
According to Tennessee Department of Revenue projections, this tax cut will result in a decrease in revenue of $1,485,100 to the state and $789,200 to local governments. (3/8 of Hall Tax collections are apportioned back to the county or incorporated city where the individual income taxpayer resides.)
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