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CEA Legislative

Scorecard 2021

HB 21-1311: Income Tax

Bill Summary:

Section 2 of the bill modifies how taxable income is determined for individuals for purposes of the state income tax. Specifically, it:

Imposes a cap for taxpayers with adjusted gross incomes equal to or exceeding $400,000 on certain itemized deductions claimed under the internal revenue code; Repeals, for social security income that is included in federal taxable income only, the cap on the deduction for pension and annuity income received; Adds a cap, per taxpayer per beneficiary, on the deduction for contributions made to 529 plans; Requires individual taxpayers to add amounts of federal taxable income that are equal to the enhanced federal deductions for food and beverage in a restaurant for the 2022 income year; and Extends the limit on the federal deduction allowed under section 199A of the internal revenue code. Section 3 increases the earned income tax credit to 20% for income tax years commencing on or after January 1, 2022, and but before January 1, 2023, and income tax years commencing on or after January 1, 2026. Section 3 also increases the earned income tax credit to 25% for income tax years commencing on or after January 1, 2023, but before January 1, 2026. Finally, section 3 applies the lowered minimum age for individuals without a qualifying child in the federal "American Rescue Plan Act of 2021" to the state credit for income tax years commencing on or after January 1, 2022.Section 4 funds the child tax credit for income tax years commencing on or after January 1, 2022, and allows a child tax credit in the state regardless of the federal requirement that a qualifying child must have a social security number for the federal child tax credit. Section 4 also specifies that if the changes to the federal child tax credit in the "American Rescue Plan Act of 2021" are no longer in effect, the percentages of the state child tax credit are increased.Sections 5 through 7 make the state's corporate income tax more uniform compared to other states by replacing the current combined reporting standard with the multistate tax commission's standard. In addition, these sections modify Section 5 modifies the computation of the corporate income tax receipts factor to make it more congruent with the unitary business principle combined reporting .In addition to making the state's corporate income tax more uniform compared to other states, section 6 Section 5 also prevents corporations from using tax shelters in foreign jurisdictions for the purpose of tax avoidance.Section 7 Section 6 functions to prevent corporations from using tax shelters in foreign jurisdictions for the purpose of tax avoidance and additionally modifies how taxable income is determined for C corporations for purposes of the state income tax. Specifically, it requires corporate taxpayers to add amounts of federal taxable income that are equal to the enhanced federal deductions for food and beverage in a restaurant for the 2022 income year.Section 8 repeals a Section 7 limits the state subtraction for certain capital gains incurred by allowing the subtraction to a taxpayer who is required to file a Schedule F, profit or loss from farming, as an attachment to the taxpayer's federal income tax return for the tax year in which the net capital gains arise for the sale of real property, not tangible personal property, that is classified as agricultural land for property tax purposes .Section 9 Section 8 creates a temporary income tax credit for a business for a percentage of the conversion costs to convert the business to a worker-owned coop, an employee stock ownership plan, or an employee ownership trust.Sections 10 through 13 9 through 12 address the avoidance of income tax by certain captive insurance companies.Section 13 adds an appropriation to the office of the governor for use by the office of economic development for the administration of the income tax credit for a business converting to a worker-owned coop, an employee stock ownership plan, or an employee ownership trust.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

CEA Position Rationale: We have been in support of the process last year and this year of efforts to close corporate tax loopholes. We should be in support because this is a continuing fight. 
Tier: 3

CEA Supported

House Status: Passed
Senate Status: Passed
Final Status: Passed

Read the bill (PDF) »

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Pro-Education VoteAnti-Education VoteNo vote taken

House Votes:

NamePartyDistrictVote
Amabile, JudyDemocrat13Pro-Environment Vote
Bacon, JenniferDemocrat7Pro-Environment Vote
Baisley, MarkRepublican39Anti-Environment Vote
Benavidez, AdrienneDemocrat32Pro-Environment Vote
Bernett, TracyDemocrat12Pro-Environment Vote
Bird, ShannonDemocrat35Pro-Environment Vote
Bockenfeld, RodRepublican56Anti-Environment Vote
Boesenecker, AndrewDemocrat53Pro-Environment Vote
Bradfield, MaryRepublican21Anti-Environment Vote
Caraveo, YadiraDemocrat31Pro-Environment Vote
Carver, TerriRepublican20Anti-Environment Vote
Catlin, MarcRepublican58Anti-Environment Vote
Cutter, LisaDemocrat25Pro-Environment Vote
Daugherty, LindseyDemocrat29Pro-Environment Vote
Duran, MonicaDemocrat24Pro-Environment Vote
Esgar, DaneyaDemocrat46Pro-Environment Vote
Exum, TonyDemocrat17Pro-Environment Vote
Froelich, MegDemocrat3Pro-Environment Vote
Garnett, AlecDemocrat2Pro-Environment Vote
Geitner, TimRepublican19Anti-Environment Vote
Gonzales-Gutierrez, SerenaDemocrat4Pro-Environment Vote
Gray, MattDemocrat33Pro-Environment Vote
Hanks, RonRepublican60Anti-Environment Vote
Herod, LeslieDemocrat8Pro-Environment Vote
Holtorf, RichardRepublican64Anti-Environment Vote
Hooton, EdieDemocrat10Pro-Environment Vote
Jackson, DominiqueDemocrat42Pro-Environment Vote
Jodeh, ImanDemocrat41Pro-Environment Vote
Kennedy, ChrisDemocrat23Pro-Environment Vote
Kipp, CathyDemocrat52Pro-Environment Vote
Larson, ColinRepublican22Anti-Environment Vote
Lontine, SusanDemocrat1Pro-Environment Vote
Luck, StephanieRepublican47Anti-Environment Vote
Lynch, MikeRepublican49Anti-Environment Vote
McCluskie, JulieDemocrat61Pro-Environment Vote
McCormick, KarenDemocrat11Pro-Environment Vote
McKean, HughRepublican51Anti-Environment Vote
McLachlan, BarbaraDemocrat59Pro-Environment Vote
Michaelson Jenet, DafnaDemocrat30Pro-Environment Vote
Mullica, KyleDemocrat34Pro-Environment Vote
Neville, PatrickRepublican45Anti-Environment Vote
Ortiz, DavidDemocrat38Pro-Environment Vote
Pelton, RodRepublican65Anti-Environment Vote
Pico, AndresRepublican16Anti-Environment Vote
Ransom, KimRepublican44Anti-Environment Vote
Rich, JaniceRepublican55Anti-Environment Vote
Ricks, NaquettaDemocrat40Pro-Environment Vote
Roberts, DylanDemocrat26Pro-Environment Vote
Sandridge, ShaneRepublican14Anti-Environment Vote
Sirota, EmilyDemocrat9Pro-Environment Vote
Snyder, MarcDemocrat18Pro-Environment Vote
Soper, MattRepublican54Anti-Environment Vote
Sullivan, TomDemocrat37Pro-Environment Vote
Tipper, KerryDemocrat28Pro-Environment Vote
Titone, BriannaDemocrat27Pro-Environment Vote
Valdez, AlexDemocrat5Pro-Environment Vote
Valdez, DonaldDemocrat62Pro-Environment Vote
Van Beber, TonyaRepublican48Anti-Environment Vote
Van Winkle, KevinRepublican43Anti-Environment Vote
Weissman, MikeDemocrat36Pro-Environment Vote
Will, PerryRepublican57Anti-Environment Vote
Williams, DaveRepublican15Anti-Environment Vote
Woodrow, StevenDemocrat6Pro-Environment Vote
Woog, DanRepublican63Anti-Environment Vote
Young, MaryDemocrat50Pro-Environment Vote

Senate Votes:

NamePartyDistrictVote
Bridges, JeffDemocrat26Pro-Education Vote
Buckner, JanetDemocrat28Pro-Education Vote
Coleman, JamesDemocrat33Pro-Education Vote
Cooke, JohnRepublican13Anti-Education Vote
Coram, DonRepublican6Anti-Education Vote
Danielson, JessieDemocrat20Pro-Education Vote
Donovan, KerryDemocrat5Pro-Education Vote
Fenberg, StephenDemocrat18Pro-Education Vote
Fields, RhondaDemocrat29Pro-Education Vote
Garcia, LeroyDemocrat3Pro-Education Vote
Gardner, BobRepublican12Anti-Education Vote
Ginal, JoannDemocrat14Pro-Education Vote
Gonzales, JulieDemocrat34Pro-Education Vote
Hansen, ChrisDemocrat31Pro-Education Vote
Hisey, DennisRepublican2Anti-Education Vote
Holbert, ChrisRepublican30Anti-Education Vote
Jaquez Lewis, SonyaDemocrat17Pro-Education Vote
Kirkmeyer, BarbaraRepublican23Anti-Education Vote
Kolker, ChrisDemocrat27Pro-Education Vote
Lee, PeteDemocrat11Pro-Education Vote
Liston, LarryRepublican10Anti-Education Vote
Lundeen, PaulRepublican9Anti-Education Vote
Moreno, DominickDemocrat21Pro-Education Vote
Pettersen, BrittanyDemocrat22Pro-Education Vote
Priola, KevinRepublican25Anti-Education Vote
Rankin, BobRepublican8Anti-Education Vote
Rodriguez, RobertDemocrat32Pro-Education Vote
Scott, RayRepublican7Anti-Education Vote
Simpson, CleaveRepublican35Anti-Education Vote
Smallwood, JimRepublican4Anti-Education Vote
Sonnenberg, JerryRepublican1Anti-Education Vote
Story, TammyDemocrat16Pro-Education Vote
Winter, FaithDemocrat24Pro-Education Vote
Woodward, RobRepublican15Anti-Education Vote
Zenzinger, RachelDemocrat19Pro-Education Vote