Gov. Bill Haslam has signed legislation that reduces taxes for seniors and helps Tennessee remain one of the top states for retirees.
At a ceremonial bill signing held Tuesday in Fairfield Glade, Haslam said, “In Tennessee we brag a whole lot about not having an income tax, which is a really good thing, but as some of you in this room know, we do tax the income off of interest and dividends, and if you’re a senior citizen who moved here from somewhere else and made your living off of a[n] income based on interest and dividends, you feel the pressure of that. We want this to be a place where people choose.”
The bill, HB192/SB198, raises the exemption income level for the Hall Income Tax for senior citizens. Single filers 65 years old with an income of less than $33,000 and joint filers with at least one spouse at least 65 years old with an income of less than $59,000 are exempt from the income tax on interest and dividend income from investments.
Previously, single filers at least 65 years old with an income of less than $26,200 and joint filers with at least one spouse at least 65 years old with an income of less than $37,000 were exempt from the Hall Income tax.
Senate Majority Leader Mark Norris (R-Collierville), House Majority Leader Gerald McCormick (R-Chattanooga) and state Rep. Cameron Sexton (R-Crossville) sponsored the bill.
Sexton introduced Haslam at the event and noted several of his legislative achievements, particularly several tax cuts. In fact, this is the second increase in exemptions for the Hall Income Tax. In 2011, Haslam signed legislation that lifted the exemption from $16,200 to $26,200 for single filers and $27,000 to $37,000 for joint filers. Taken together, the bills passed in 2011 and 2013 have doubled the income level at which senior citizens remain exempt from the Hall Income Tax. Sexton also noted reductions in the grocery tax on food, the inheritance tax and the gift tax.
“Recently, due to all the things that we’ve done, we are now ranked as the best state to retire to in the nation,” Sexton said. “So it does matter who governs. It does matter who you elect. In three years we have moved this state forward, and what you see now is Texas following Tennessee’s lead in trying to reduce their taxes.”
Haslam responded to comments that suggested these cuts were made to benefit only wealthy seniors while ignoring the middle class.
“If you look at who this affects, it’s definitely middle income seniors with incomes in the $39-55,000 range, so thats not exactly wealthy folks, number one; and number two, since we’ve been in office – the total grocery tax – we’ve cut over 10 percent of that just in the last two years. So again, I think we’re making headway on that for the first time,” Haslam said.
The law is effective retroactive to Jan. 1, 2013, for tax purposes.