This will be the first year we've had to pay it, but we'll only end up paying about $250. Ultimately I think the benefits from living in Tennessee with no income tax far outweigh the minor inconvenience of being taxed 6% on your dividends. Even if all of your income came from dividends it would be a pretty minor expense to account for. You would just need to save a few percent more before FIRE. If I understand it correctly the Hall Tax doesn't apply to capital gains, so theoretically you could try and find funds/investments that don't produce much in the way of dividends, but I don't think it's worth the hassle.