NASHVILLE, Tenn. (AP) – Republican Gov. Bill Haslam has signed a bill into law that will phase out the state’s Hall tax on earnings from stocks and bonds.
The law reduces the tax by 1 percentage point in the first year and then requires future reductions to eliminate the tax altogether by 2022.
Haslam signed the bill Friday despite his administration’s earlier concerns about the measure for requiring the future cuts regardless of how the state’s economy performs.
The initial cut amounts to a 17 percent reduction for Hall tax payers. The change is projected to cause a loss of $28 million in state revenues, plus another $15 million from the communities where the tax is collected.
Some mayors of have warned warn they will have to try to make up the revenues elsewhere.