Cutting Hall Income Tax could hit city budgets in Tennessee

Cutting Hall Income Tax could hit city budgets in Tennessee

Posted:

NASHVILLE (AP) - Legislative efforts to eliminate Tennessee's tax on dividends and interest are raising concerns among local government officials who fear losing even more revenue amid already tough economic conditions.

Republican Rep. Cameron Sexton of Crossville, who has filed a bill to phase out the Hall Income Tax, said the 6% levy is particularly unfair to seniors living on a fixed income.

The state collected $172 million in Hall taxes last year, of which $62 million was directed back to local governments.

Brentwood City Manager Mike Walker said it would likely require a 10-cent increase in the Nashville suburb's property tax rate to make up for the loss of the $2 million it collects each year in Hall taxes.

House Democratic Caucus Chairman Mike Turner of Nashville said Democrats are interested in a tax break as long as it's not "just a gift for rich people."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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