The Hall tax was established by action of the Tennessee General Assembly in 1929, by Chapter 86, Public Acts of 1929, enacted on April 10, 1929. It is named for Frank S. Hall, the state senator who sponsored the legislation.
It's a great question to ask -- especially while you pore over tax forms this year. Seven U.S. states currently don't have an income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. And residents of New Hampshire and Tennessee are also spared from handing over an extra chunk of their paycheck on April 15, though they do pay tax on dividends and income from investments.
Adding the state tax on profits to our criteria leads us to drop otherwise retiree-friendly South Carolina from our top ten list. Its top income tax rate of 7% kicks in once income exceeds $14,400. South Dakota, which has no income tax, takes its place on our list of the most tax-friendly states for retirees. Nevada, another no-income-tax state that also has relatively low property taxes, moves up to No. 3 on our list.