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HB24-1134

Adjustments to Tax Expenditures to Reduce Burden

Concerning adjustments to existing income tax expenditures to reduce taxpayer burden, and, in connection therewith, making adjustments to the credit for child and dependent care expenses; increasing the value of the earned income tax credit as a percentage of the federal credit for income tax years commencing on or after January 1, 2024; repealing obsolete provisions concerning the corporate income tax; and making the state's corporate income tax more uniform compared to other states by replacing the current combined reporting standard with the multistate tax commission's standard and modifying the computation of the receipts factor to make it more congruent with the unitary business principle.
Session:
2024 Regular Session
Subject:
Fiscal Policy & Taxes
Bill Summary

Sections 1 and 2 of the bill modify 2 existing state income tax credits for child care expenses. Under current law, one of the credits can be claimed by an individual who claims the federal credit allowed for child and dependent care expenses (federal credit). The other credit can be claimed under the same parameters as the first credit but by an individual who does not meet the minimum income threshold to be able to claim the federal credit. The bill streamlines the 2 state income tax credits into one credit to be claimed for income tax years commencing on and after January 1, 2026. The bill also clarifies that the credit is for expenses related to child care and dependent care, as such expenses are qualified under the federal credit. Section 3 increases the amount of the state earned income tax credit (EITC) that can be claimed by an individual as a percentage of the individual's federal earned income tax credit (federal credit) amount for all income tax years commencing on or after January 1, 2024, from current levels of 38% for income tax years commencing in 2024, 25% for income tax years commencing in 2025, and 20% for income tax years commencing in 2026 or any later year to 50%. Sections 4 and 5 make the state's corporate income tax more uniform compared to other states by replacing the current combined reporting standard with the multistate tax commission's standard. In addition, these sections modify the computation of receipts factor to make it more congruent with the unitary business principle. Section 4 also repeals obsolete provisions concerning corporate income tax.
(Note: This summary applies to this bill as introduced.)

Status

Introduced
Under Consideration

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Bill Text

Upcoming Schedule

Feb
26
Monday

Finance

1:30 pm  |  HCR 0112

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