Bloomberg has published an article which concludes that Tennessee has the third lowest taxes of any state in the country. It is somewhat surprising to me that the two states that are ahead of Tennessee both have a state income tax. Mississippi has a 5% income tax, and South Carolina has a 7% income tax.
A lot of my clients feel like they are heavily taxed by Tennessee due to the Hall income tax on dividends and interest as well as gift or inheritance taxes upon transfers of wealth to younger generations. Several of our clients have moved to Florida to avoid the Hall tax, the gift tax, and the inheritance tax. It is somewhat ironic that Florida is not ranked in the best 5 states due to its heavy property taxes.
As usual, there are numerous bills before the Legislature to reduce or eliminate the Hall tax and gift and inheritiance taxes. Lets hope that some of these bills are enacted so that we can take over the #1 ranking.