2014 End of Session Wrap Up: Tax and Revenue – Income Tax Related Legislation

This post summarizes the status of tax and revenue bills related to the income tax that MACo either considered or took a position on.

Military Retirement Income: HB 770 / SB 278 would have expanded the existing military retirement subtraction modification for retirees from $5,000 to $10,000. MACo opposed this legislation as it would have cost local governments almost $6 million in local income tax revenues.

SB 143 would have expanded the existing military retirement subtraction modification for retirees age 65 and over from $5,000 to $10,000.  MACo did not take a position on this legislation.

Final Status:  HB 227 / SB 572  were each heard by their respective committees with no further action taken.  SB 143 was voted favorable by the Senate, no vote was taken by the House Ways and Means Committee.

Accelerated Depreciation: HB 1114 would have allowed property that qualifies for depreciation under the Internal Revenue Code (IRC) to be depreciated under the State income tax by 100% in the year in which the property is placed in service. MACo opposed this legislation as it would have cost local governments $56 million in local income tax revenues.

Final Status: HB 1114 was withdrawn by the sponsor.

Subtraction Modification – S Corporations, Limited Liability Companies, Partnerships: SB 858 would have established a subtraction modification for the first $50,000 of nonpassive income that is distributed to a member of a pass-through entity (PTE – S Corporation, Limited Liability Company, Partnership). MACo opposed this legislation as it would have cost local governments $70 million in local income tax revenues.

Final Status: SB 858 had a hearing in the Senate Budget and Taxation Committee with no further action taken.

 

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