Senate sends tax reform bill back to House with changes, expect conference committee

On Monday, legislation making changes to the state’s tax code passed through the Senate unanimously, sending the bill back to the House with changes to the bill. The changes to that legislation set the stage for a conference committee to come to an agreement in the coming days.

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.

The bill passed through the Senate with a committee substitute making changes to the original House language. Read more about those changes here.

Leaders from both caucuses in the Senate expressed support for fixing the unintended consequences of the tax bill and touched on things they would like to see addressed in the discussions moving forward in a conference committee.

Senate President Robert Stivers discussed issues with the state’s current bank franchise tax, giving examples of lost revenue and jobs because of the tax and said he would like to see that issue discussed moving forward. Learn more about the bank franchise tax on The Bottom Line here.

Democratic Minority Leader Morgan McGarvey said he looks forward to the discussions that will be had in a conference committee and would like to see policies that impact the largest number of Kentuckians in the best way and noted his opposition to discussions about scholarship tax credits in the tax reform discussion.

House Bill 354 now goes back to the House where the body will either concur with the changes or more likely appoint a conference committee to come to an agreement on the issue. Tuesday will mark the 24^th day of the 30-day session, meaning they will need to move on the issue in the coming days.