HB 273 -- Taxation of Food and Federal Income Taxes

Co-Sponsors:  Auer, Troupe, Dougherty

Under current law, certain food types are taxable for local
sales tax purposes.  This bill exempts these food types from all
local sales taxes imposed by political subdivisions.

The bill also reduces the maximum federal income tax paid
deduction allowed for individuals and corporations for state
income tax purposes.  The maximum individual income tax
deduction for federal income taxes paid will be reduced from
$5,000 for a single taxpayer and $10,000 for married taxpayers
to $4,000 and $8,000, respectively.  The maximum deduction
percentage of federal income taxes paid by a corporation allowed
will be reduced from 50% to 40%.

All state revenue received from the reduction of the federal
income tax deduction on individuals and corporations will be
deposited into an account to be known as the Local Revenue
Replacement Fund.  Moneys in this fund will be disbursed to
political subdivisions in an amount necessary to replace the
lost revenues of the political subdivisions as the result of the
local sales tax exemption on the sales of certain food types.
The fund and disbursement of the moneys will be administered by
the Department of Revenue.

This bill contains a referendum clause and will become effective
on January 1 of the year immediately following the passage of
this act by the voters of this state.