MACo Legislative Director Kevin Kinnally yesterday submitted testimony to the Senate Budget and Taxation Committee in opposition to SB 870 Income Tax – Subtraction Modification – COVID-19 – Related Distribution of Retirement Income. This emergency bill creates a subtraction modification against the State and local income tax for an individual who makes a qualified COVID-19 related distribution from a retirement account.
According to the bill’s fiscal note, local revenues will decrease by $70.2 million in FY 2022 and by $7.8 million in FY 2023. MACo opposes state-mandated reductions in local revenue sources, but welcomes tools to grant counties options and flexibility to pursue their own parallel tax incentives, or to develop others to suit their local needs.
From the MACo Testimony:
The swift and unprecedented shock of the COVID-19 public health crisis has wreaked havoc on the economy. As the focus shifts to restoring our state and local economies in a manner that is safe, equitable, and prosperous for all, counties are eager and committed partners in promoting economic growth and creating opportunity – we prefer local autonomy in determining the best way locally.
MACo urges the Committee to primarily consider state income tax credits as the best means to incorporate local tax relief as part of a broader policy. MACo and county governments hope the Committee finds these comments helpful. Counties stand ready to work with state policymakers to develop flexible and optional tools to create broad or targeted tax incentives, but resist state-mandated changes that preclude local input.
Follow MACo’s advocacy efforts during the 2021 legislative session on MACo’s Legislative Tracking Database.