Does Tennessee

[Bird Legs]

have a individual state income tax?
Would appreciate an answer from anyone who knows.
Thanks

[Matt Sova]

Nope

They do have an intangibles tax though. Just like FLA

[Bird Legs]

Matt

Thanks for your response. Am not too concerned about the intangibles tax.
Have a client that lives in San Antonio, TX but worked in Tennessee all of 2005.

[Snaggletooth]

the Hall Income Tax

Stevie, Tennessee does have an income tax, a bizarre thing called the "Hall" tax. Imposed only on residents, so a Texas guy could not be liable.

The Hall tax reeks of special interest legislation. Passed in 1953 by the capitol gang in Nashville and their banking lobbyists. Tennessee banks did not want people investing in things other than bank saving accounts, CDs, life insurance policies, etc. and they didn't want ANY money invested out-of-state. So they got the legislature to pass this ridiculous Hall tax.

Essentially taxes ALL dividends and interest, but then excludes interest from Tennessee banks and dividends from Tennessee-chartered public protectorates (like farm co-ops, electric utilities, etc.).

The Hall tax was put to its most severe test in the early 80s. At the time Tennessee did not allow out-of-state banks to operate in Tennessee. A Knoxville banker, Jake Butcher, ran for governor and drained bank reserves all over the state to finance his campaign and allegedly buy favors and influence. His defeat left the state banking system so weak they couldn't even underwrite municipal bonds. In order to save the system Butcher then used what remaining funds to finance the 1982 World's Fair in Knoxville, but the Fair only broke even.

In desperation, the Tennessee banking system finally turned to its neighboring states for help, and let in banks from "contiguous states" (we have eight of them) to rescue the system from collapse. Only a few of the original Tennessee banks remain in small towns, as we have been invaded by all the large national banks, now. Wachovia, Bank of America, etc.operate under a Tennessee charter here and interest thereof is exempted from the "Hall" income tax.

Among candid Tennessee government people, the Hall tax is an embarrassment. A totally wacko tax, and a goofball reminder that Tennessee's legislators can be bought and sold. There are very powerful influences here that want us to have a state income tax, and if this ever happens, the Hall tax will be absorbed into the general income tax and be gone.

[Matt Sova]

Hard to believe

Among candid Tennessee government people, the Hall tax is an embarrassment. A totally wacko tax, and a goofball reminder that Tennessee's legislators can be bought and sold. There are very powerful influences here that want us to have a state income tax, and if this ever happens, the Hall tax will be absorbed into the general income tax and be gone.

I find it hard to believe that Tennessee has politicians that pass totally wacko taxes and that they can be bought and sold. I know of no other state that has politicians like that!!!

Matt

[Brian EA]

have a individual state income tax?
Would appreciate an answer from anyone who knows.
Thanks

State return is one less item you do not have to worry about if you are using Drake Software.

With Drake, all State returns are automatically prepared.

[Chief]

Misc comments on these post

Matt, you mean Michigan does not have politicians who can be bought and sold?

Snag, haven't heard the name of Jake Butcher in years. Is he still in prison? That Knoxville World Fair was the worst event I've ever attended. Too many people in too small a space.

[Snaggletooth]

Can't separate taxes and politics

Chief, the Board is not designed for political discussions, and ranting/raving, but when it comes to Taxes, it's hard to separate taxes from politics.

I'll tell this one -- a very well-known story in Tennessee, but will tell it for the benefit of other readers across the country, for example places like Michigan where all Matt's politicians are honest. (Mercifully, Matt spared us from ranting about the General Business tax in that state, which some call the "dumbest tax ever").

In 1974, Governor Ray Blanton won the Democratic primary with only 27% of the vote (note that in Tennessee the state does not want the cost of a run-off election, so only if you don't have a majority over 50%, then any plurality vote will win no matter how small). Blanton was not very popular, but ran the state for almost four years anyway and decided not to seek re-election.

With only a few weeks left to go in his term, news reports surfaced that if you were able to somehow divert $10,000 to his office, you could buy a pardon through the Dept. of Corrections. The news media got wind of several people who had been pardoned and the Attorney General subpoened certain Prison documents from the Dept of Corrections with full promise to the press that the results would be released to the media. The Dept of Corrections had packed up a bunch of these documents and when the investigators came, the documents were no longer there. Somehow, and mysteriously so, the Highway Patrol stopped a truck travelling Eastbound on I-40 only a few miles from the North Carolina border. This truck contained all of the documents the Attorney General was looking for.

The news story virtually blew up overnight, and reporters swarmed the Governor's office like a bunch of angry hornets. Blanton was shown on camcorder literally knocking reporters out of the way like a madman. Finally, he consented to a press release with one TV station only, in an obvious attempt to limit the donnybrook. When asked pertinent questions he responded "I'm sick and tired of all this negative press, if you don't shut up I'm going to turn out ALL of death row!!" He cut the interview short and left, and by the time of the evening news, the interview was playing all over national TV.

Blanton, not seeking re-election, was a lame duck with only 4 days left in office. The next governor, Lamar Alexander, was governor-elect waiting to be sworn in later that week. Some of the members of Blanton's cabinet went to the Legislature telling them that Blanton was IN FACT going to release mass numbers of prisoners the very next day, pardoning hundreds of prisoners, including emptying out ALL of death row at the state Penitentiary.

The Legislature couldn't believe it, but decided to take no chances. They summoned up the next governor, Alexander, in the middle of the night, and swore him in three days early and pronounced him the new governor. When Blanton awoke the next morning, the sergeant-at-arms greeted him with a proclamation that the legislature had nullified his last three days in office. A moving van was there to move Blanton back to his home in Adamsville (also Buford Pusser's home town, for what that's worth).

Attention all Yankees: welcome to the Sunny South, but be prepared!!

[veritas]

What a great story!

The best I can think of here is old Governor Goldsmidt (he was transportation scecretary for Carter) who was a child molestor for years but the Oregonain, the local news and all his political buddies didn't think we should know about it. I guess they aren't biased or anything, probably just trying to help his self esteem

[Chief]

Tenn Politics by Snag

Just a note in passing for Snag. My older son received one of his graduate degrees from UT in Knoxville. Helen and I met Lamar Alexander at a reception he held for the graduates at the president's home in Knoxville.

I also had the honor of meeting Blanton a few weeks before he died. While working as the Library Director at Union University we had an annual Christmas reception. One year he attended the reception. Seemed to be a friendly and gracious man.

Snag, you are correct. In Southern states it is nearly impossible to separate taxes from politics. But isn't that true of the entire country?

[Matt Sova]

Of course

Matt, you mean Michigan does not have politicians who can be bought and sold?

Snag, haven't heard the name of Jake Butcher in years. Is he still in prison? That Knoxville World Fair was the worst event I've ever attended. Too many people in too small a space.

I can't believe you could not pick up on the sarcasm, I thought I was laying on pretty darn thick!!!!

[Chief]

Sarcarsm

I can't believe you could not pick up on the sarcasm, I thought I was laying on pretty darn thick!!!!

Gotcha you, Matt.