Gov. Bill Haslam says he’s considering the idea of cutting or eliminating the tax on large gifts, which has “been brought up by several legislators.” But the governor said he won’t know until April whether the state can afford it.
Knocking down the gift tax is the newest addition to a handful of tax cuts Republican leaders say they want to see this year.
“We’ve heard a lot of folks saying they would like that addressed,” Haslam told reporters after speaking to the Nashville Area Chamber of Commerce in downtown Nashville Tuesday.
“We have a whole lot of requests for budget amendments. Way, way more than we can ever fund, and so we’re trying to wade through that and prioritize amongst a lot of different areas of interest,” he said.
People now pay a 5.5 percent to 16 percent state tax on pricey gifts such as a car, land or wealth.
The tax applies for gifts worth $13,000 within the family or gifts of more than $3,000 to others.
Last budget year, the state collected more than $296,000 in gift taxes, a 9 percent increase over the year before, according to the Department of Revenue.
Eliminating the gift tax is as important as the governor’s preferred tax cuts on food and inheritances, said House Speaker Beth Harwell.
Senate Speaker Ron Ramsey says he’ll back a reduction in the gift tax, but he’s also pushing for a reduction in the tax on income from stocks and dividends although Harwell and Haslam say that tax is not among their priorities.
“We actually don’t have anything on the Hall this year,” Haslam said. “We did last year. There’s nothing on the Hall this year.”