NASHVILLE, June 9, 2016– (CLARKSVILLENOW.COM) – Governor Bill Haslam today held a ceremony in Nashville marking the signing of historic legislation sponsored by Senator Mark Green (R-Clarksville) to phase out Tennessee’s Hall Income Tax. The new law, which will make Tennessee income tax free by January 1, 2022, has been a legislative priority of Green’s since taking office in 2012.
“Our citizens should never be penalized to work or to save,” said Senator Green, who is Vice-Chairman of the Senate Commerce Committee. “Any income tax does just that and this law ends the taxation of savings and investment.”
The Hall Income Tax levies six percent on earnings from stocks and bonds, with 3/8 of the revenue going to cities and counties. Since enactment of the tax in 1929, the use of investment savings has grown as a primary source of retirement income, which Green said penalizes retirees disproportionately.
“Whether a couple saving for their future or an investment group creating jobs in our state, Tennessee has just removed a barrier to economic freedom in our state and I am very pleased that this legislation has been signed into law,” Green added. “Unlike the government out of Washington, Tennessee continues to be an effective steward to our citizens with a balanced budget and prioritized spending.”
Under the new law, the tax rate will be reduced from 6 to 5 percent, a 17 percent cut from the total dollars collected by the state for fiscal year 2016. The intent of the General Assembly in successive years is that the tax on investment and dividend income will be cut by at least 1 percent annually until it is no longer collected and eliminated as a legal means of taxation in Tennessee by January 1, 2022.
Senator Mark Green has served Montgomery, Houston and Stewart Counties since 2012 with legislative priorities featuring job creation, educational excellence supporting students and teachers and support for our military veterans and their families.