House and Senate make progress on tax reforms, expect final plan in coming days

House and Senate members on the free conference committee attempted to tackle tax reform changes and made some progress on agreements when they met Tuesday morning.

The group mainly covered items that were already in either the House or Senate version of the tax reform bill and have not yet covered any potential additional tax policies that could potentially be included in the bill.

On the issue of taxing nonprofits, the conference committee agreed to go with the Senate’s proposal, which changes language to exempt all charitable admissions and exempts the sales of items at occasional events like fundraisers held by nonprofits from the sales tax. These changes apply to all nonprofits. Senate Appropriations and Revenue Committee Chair Chris McDaniel noted that much of the issues surrounding the taxing of nonprofits was a result of court cases and Department of Revenue enforcement, and not the tax reform bill passed during the 2018 session.

There have been some questions about teenagers who mow lawns in the summer, housekeepers, and some other services and whether they would need to collect sales tax for their services as a result of the 2018 reforms. The committee said Tuesday they believe a $6,000 threshold may be appropriate for these examples, meaning if an individual made over $6,000 a year providing such a service, any dollar over that threshold would then be subject to the state’s 6% sales tax.

The issue of combined reporting was mentioned in the committee but no solution was put forth as the group agreed this was an item they would discuss further in order to potentially reach an agreement. The business community has advocated for the repeal of mandatory combined reporting.

Lawmakers on the committee went through each difference in the proposals and agreed on language for most other items Tuesday morning.

They adjourned the committee with an agreement to meet again at 8 am on Wednesday to hopefully craft a final agreement and begin to move the language through each legislative chamber. Wednesday will mark the 28th day of the 30-day 2019 session.

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