Tennessee eliminated its “death tax” in 2016.  This is great news for Tennessee residents.  However, if you own property such as a vacation home in another state, you may owe “death taxes” in that estate when you die.  The following 18 states still impose a death tax:

Connecticut
Delaware
District of Columbia
Hawaii
Illinois
Iowa

A number of our clients have already changed their residency to a state with no income taxes – most often Florida, or have been considering making such a change.  They have moved to avoid paying the Tennessee Hall Income Tax which applies to dividends and certain interest.

If you have already moved, you can start

Prior to this year, all Tennessee trusts were required to file annual Tennessee income tax returns. This includes garden variety revocable trusts as well as irrevocable grantor trusts that use the grantor’s social security number as their EIN.

Fortunately, the Tennessee legislature decided to solve this problem. Public Chapter 480 now allows grantor trusts to

In a surprising move, the Tennessee legislature has repealed Tennessee gift taxes, effective for gifts made on or after January 1, 2012. This is welcome news for a lot of our clients who plan to make a $5.12 million gift later this year. Our clients have been considering various ways to make their gifts without paying Tennessee

The Tennessee legislature repealed Tennessee’s inheritance tax, effective as of January 1, 2016. This means that if you can survive until 2016, you will not owe any Tennessee inheritance taxes. If you die before that date, you will owe taxes if your taxable estate exceeds the following exemption levels:

2012

$1,000,000

2013

$1,250,000

2014

$2,000,000

2015

Over the last several years, several of our clients have changed their residences to Florida to avoid certain Tennessee taxes, including our inheritance taxes. Migration to avoid state inheritance taxes has also been occurring in other states.

Last week, the Wall Street Journal published an article about various states, including Tennessee, that are considering a repeal

Tax Foundation has published a map showing the top income tax rates in all 50 states. There are seven states that have no income taxes at all: Alaska, Washington, Nevada, Wyoming, South Dakota, Texas, and Florida. Tennessee and New Hampshire only tax dividends and interest. Except for Iowa, the high tax states are on the coasts.