NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature. The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.
Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.
| SPONSOR: | Altamirano | DATE TYPED: | 02/15/01 | HB | |||
| SHORT TITLE: | One-Time Heating Bill Relief Rebate | SB | 343 | ||||
| ANALYST: | Williams | ||||||
| Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
| FY01 | FY02 | |||
| $ (38,500.0) | $ (1,150.0) | Non-recurring | General Fund | |
| $ (24,400.0) | $ (22,100.0) | Recurring | General Fund | |
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates/Conflicts with/Companion to/Relates to SB 43, SB 108, SB 124, SB 213, SB 236, SB 365, HB 97, HB 123, HB 235, HB 382, HB 424
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department analysis
SUMMARY
Synopsis of Bill
Senate Bill 343 is a personal income tax reduction package with two major components. The first component is a one-time rebate called the "heating bill relief rebate". The amount of the rebate ranges from $5 to $160, depending on filing status and income level. The rebate is not available when single adjusted gross income is over $25,000 and when married, filing joint adjusted gross income is over $50,000.
The second component consists of several rate cuts, bringing the top rate down from 8.2% to 7.9% and changes other rates as follows:
Current: 1.7%, 3.2%, 4.7%, 6.0%, 7.1%, 7.9%, 8.2%
Proposed: 1.5%, 3.0%, 4.5%, 6.0%, 7.1%, 7.9%
The bill is effective beginning tax year 2001. The delayed rebate repeal of January 1, 2005 accommodates extended filers and taxpayers filing amended returns.
Tables provided from the TRD fiscal impact report are attached to provide a basis for comparing current and proposed income brackets and tax rates.
FISCAL IMPLICATIONS
The Taxation and Revenue Department has estimated the bill would reduce general fund revenues by $38,500.0 in FY02 and $1,500.0 in FY 03 for the rebate component of the bill. The rate cuts would reduce general fund revenues on a recurring basis by $24,400.0 in FY02 and $22,100.0 in FY03.
DISTRIBUTION OF TAX REDUCTIONS
The rebate component of the bill is projected to have the following impact by income category:
| Summary By Household Income | Rebate
Returns |
%
of Taxpayers |
Total Tax
Relief
($, millions) |
% of Total |
Tax Relief Per Return |
| Up to $10,000 | 240,766 | 43.1% | $23.2 | 57.6% | $96.14 |
| $10,000 to $20,000 | 162,040 | 29.0% | $11.8 | 29.4% | $72.70 |
| $20,000 to $30,000 | 77,493 | 13.8% | $ 3.8 | 9.5% | $49.59 |
| Over 30,000 | 78,084 | 13.9% | $ 1.4 | 3.2% | $17.28 |
| Total | 558,384 | 100% | $40.1 |
100% |
$71.85 |
The tax rate reduction in the bill is projected to have the following impact.
|
Base Taxable Income |
Total Tax Relief
($, millions) |
% of Total |
Tax Relief Per Return |
| 0-15,000 | 3.31 | 13.2% | 13.85 |
| 15,000-25,000 | 3.52 | 14.1% | 36.83 |
| 25,000-40,000 | 3.92 | 15.7% | 41.99 |
| 40,000-75,000 | 4.1 | 16.4% | 45.13 |
| over 75,000 | 10.18 | 40.7% | 222.97 |
| Total | 25.03 |
100% |
44.35 |
AW/ar