Tennessee House passes tax cuts on groceries, estates

NASHVILLE, Tenn. (AP) -- The House has voted to begin phasing out Tennessee's inheritance tax and to lower the state's sales tax on groceries.

The chamber voted 88-8 on the estate tax measure Thursday, and 96-0 to cut the food tax from 5.5 percent to 5.25 percent.

Republicans hailed the estate tax cut as a way to keep retirees from moving out of state, while Democrats argued that the tax cut on groceries affects a far larger number of people.

Both measures were part of Republican Gov. Bill Haslam's legislative agenda this year.

The inheritance tax currently applies to estates worth more than $1 million, and was paid in 845 instances in the last budget year. The bill would bump that exemption up to $1.25 million next year and to $5 million by 2016.


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