This week state lawmakers are debating a phase-out of the estate tax, which could be followed by a bill to do the same to the state’s tax on cash gifts.
While the state’s gift tax brings in way less money than a levy on million-dollar estates, Governor Bill Haslam says it makes sense to get rid of both. North Carolina repealed its gift tax in 2009, leaving only Tennessee and Connecticut.
“We’re not typically in Connecticut’s neighborhood when it comes to tax policy, so I think all of us can say that’s probably not something that Tennessee wants to have.”
Haslam has been pushing hard to cut the estate tax, but he’s not ruling out a cut to the gift tax, which can be pretty complex. Currently it kicks-in at $13,000 for most family members and $3,000 for non-relatives.
The current proposal would end the distinction between family and non-family as well as raise the overall exemption levels. At a cost of roughly $600,000 a year in state revenues, the legislation has been placed “behind the budget,” meaning lawmakers want to be sure they can pay for it before debating the merits.
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