HB 97 - Taxes - 2015 Appropriations Act – Taxes

Because the General Assembly chose to include different policies in the 2015 budget bill, Civitas Action did not grade the budget bill as a whole. We have chosen several important policies to grade separately, including Tax Changes

The state personal income tax rate will drop to 5,499 percent by 2017 down from the current 5.75 percent. The standard deduction will be increased slightly (for example from $15,000 to $15,500 to married filing jointly), and the tax credit for medical expenses is reinstated. Moreover, the corporate income tax rate will drop to 4 percent next years as included in the 2013 tax reform, and will be guaranteed to drop to 3 percent the following year regardless of revenue thresholds. The sales tax base, however, will be broadened to include some services such as repair, maintenance and installation services to tangible property, such as autos. Also the corporate tax formula will move to a single sales factor, which is projected to amount to a tax cut of about $32 million over the biennium. On net, these tax changes are projected to save taxpayers nearly $400 million over the biennium.
Tax changes in the budget are considered conservative.