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HB 253 - The act creates an individual income tax deduction for business income and phases it in over a period of years. The Office of Administration is required to analyze the amount of individual and corporate income tax revenues for FY 2011 and each tax year beginning with the 2012 tax year. For a given tax year, if the preceding tax year had a greater amount of income tax revenue than FY 2011, the individual business income deduction amount will be increased by ten percent. If the preceding tax year had a lesser amount of income tax revenue than FY 2011, the individual business income deduction amount will remain the same as the previous tax year. The individual business income deduction may be increased in such a manner until the deduction reaches 50%. In lieu of the deduction calculated in the preceding method, if a business's average payroll exceeds 150% of the county average wage for the county in which the business is located, the business may deduct 50% of its business income. The act reduces the rate of tax on corporate income and phases it in over a period of years. The Office of Administration is required to analyze the amount of individual and corporate income tax revenues for FY 2011 and each tax year beginning with the 2012 tax year. For a given tax year, if the preceding tax year had a greater amount of income tax revenue than FY 2011, the tax rate on corporate income will be decreased by five-eighths of a percent. If the preceding tax year had a lesser amount of income tax revenue than FY 2011, the tax rates on corporate income will remain the same as the previous tax year. The corporate income tax rate may be decreased in such a manner until the rate reaches three and one-eighth of a percent. In lieu of the rate calculated in the preceding method, if a corporation's average payroll exceeds 150% of the county average wage for the county in which the business is located, the corporations income will be taxed at three and one-eighth of a percent. Currently, an employer is allowed to file an annual withholding tax return instead of four quarterly returns when the aggregate amount withheld is less than $20 in each of the four preceding quarters. The act changes the amount to less than $100 in each of the four preceding quarters if the employer is not otherwise required to file a withholding return on a quarterly or monthly basis. The act removes from sales and use taxes the fees paid to places of amusement, entertainment or recreation, games and athletic events. The act exempts from sales and use taxes title manufacturing or mining equipment. MIKE HAMMANN
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