Tax code cleanup measure moves forward with changes

On Friday, legislation making changes to the state’s tax code passed through the Senate Appropriations and Revenue Committee.

After the General Assembly passed a tax reform bill in the 2018 session with some unintended consequences, legislators have been talking about the need for a cleanup bill over the last year.

House Bill 354, sponsored by House Appropriations and Revenue Committee Chair Steven Rudy, cleans up those unintended consequences of the 2018 reforms, especially issues caused by the taxation of nonprofits.

Senate Appropriations and Revenue Committee Chair Chris McDaniel explained the measure now includes a Senate committee substitute which makes some pretty significant changes and while he would like concurrence from the House, he expects there will be a conference committee on the issue.

The committee substitute changes language on the nonprofits to exempt all charitable admissions and exempts the sales of items at occasional events like fundraisers held by nonprofits from the sales tax.

This differs from the House bill which expanded the exemptions for admissions to all non-profit entities and raises the threshold for taxable income to $10,000 up from the current $1,000.

Something that is still not fixed in the bill is the issue of repealing the mandatory combined reporting provision for businesses, despite advocacy on this issue by the business community.

Other small changes were made to the tax bill during the committee before it passed almost unanimously without any discussion.

The amended version of House Bill 354 now moves to the full Senate for a vote on the floor before moving back to the House for concurrence or the appointment of a conference committee.

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Jacqueline Pitts
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