I live in a state (TN) that does not have a state income tax. However, the reports from PRC Gold list a State Taxable Income and a State Income Tax for every year going forward and I'm wondering where does this data come from.
Gerard,
I believe it's true that TN does tax interest and dividend income and I've confirmed that PRC does indeed implement this assumption. So, state taxable income should be interest and dividend income minus the exemption amount. This is then multiplied by the 2% flat tax rate to arrive at the state income tax.
Prior to 2017, Tennessee did indeed tax certain interest and dividend income, at 6%. It was referred to as the "Hall Income Tax" (and was despised). However, due to General Assembly legislative action, the tax was repealed. Beginning in 2017 the tax was reduced by 1% per year over a five-year phaseout period. As of January 1, 2021 the tax has been fully eliminated, removing that obnoxious asterisk wherever TN is denoted as a no-income tax state.
There are multiple online references for the repeal and phaseout, but here is the authoritative notice from the Tennessee Department of Revenue: https://revenue.support.tn.gov/hc/en-us/articles/360057828631-HIT-3-Hall-Income-Tax-Repealed-Beginning-January-1-2021
This link details the phaseout period: https://revenue.support.tn.gov/hc/en-us/articles/360057355792-HIT-4-Hall-Income-Tax-Rate
@ilovemybeagles Thanks, David! I'll try to get that correction made in conjunction with the next update of PRC2021.
For for the sake of accuracy, the phaseout of TN's Hall Income Tax began in 2016, not 2017.
@smatthews51 I just wanted to acknowledge that those wayward Tennessee state taxes disappeared with the PRC2021.3.5 release. Thanks for implementing this.
@barber980 Ain't it grand living in such a great state? Neither it nor PRC taxes us anymore. ?
