Automatic Income Tax Rate Adjustment Act (AMENDMENTS IN PDF)

Summary

The Automatic Income Tax Rate Adjustment Act provides for a reduction in the state income tax rate on residents, nonresidents, and corporations if year-over-year revenue from the income tax exceeds certain amounts.

Automatic Income Tax Rate Adjustment Act (AMENDMENTS IN PDF)

SNPS 2019 Amendments in PDF Here

Section 1. {Adjustment Rate}

(A) In any fiscal year in which the amount of selected actual state general fund receipts from such fiscal year exceeds the selected actual state general fund receipts for the immediately preceding fiscal year by more than 2 percent, the director of legislative research [or equivalent officer] shall certify such excess amount to the secretary of revenue and the director of the budget [or equivalent officers]. Upon receipt of such certified amount, the secretary shall compute the excess percentage increase in selected actual state general fund receipts above 2 percent. Based on such excess percentage of calculation receipt growth, the secretary shall compute the income tax rate reductions to go into effect for the next tax year that would reduce by such certified amount the tax rates during the fiscal year after the next fiscal year according to the provisions of this section as follows:

(1) Rate reductions for individual income tax rates shall be applied to reduce the highest marginal income tax rate applicable to the current tax year, by such excess percentage minus 0.5 percent, and the lowest marginal income tax rate applicable to the current tax year by such excess percentage plus 0.5 percent, except that in no case shall such excess percentage plus 0.5 percent result in an income tax rate increase. In any such computation by the secretary pursuant to this subsection:

(i) The resulting income tax rate shall be rounded down to the nearest 0.1 percent; and

(ii) in any case in which the income tax rate for any individual marginal income tax rate is below 0.4 percent, such rate shall be 0 percent.

(2) Upon all individual marginal income tax rates being reduced to 0 percent pursuant to the provisions of subsection (A)(1), rate reduction next shall be applied for the surtax on corporations applicable to the current tax year by such excess percentage. In any such computation by the secretary pursuant to this subsection in which the surtax is below 0.4 percent, such surtax rate shall be 0 percent.

Section 2. {Severability clause.}

Section 3 {Repealer clause.}

Adopted by the Tax and Fiscal Policy Task Force at the Spring Task Force Summit on April 23, 2010.

Approved by the ALEC Board of Directors on June 3, 2010.

Amended by the Task Force on Tax and Fiscal Policy at the Spring Task Force Summit on May 15, 2015.

Approved by the ALEC Board of Directors on June 29, 2015.