OKLAHOMA CITY – The Senate Finance Committee met Thursday morning (April 4), passing a revised version of House Bill 2032, the income tax reduction that previously passed the House of Representatives. President Pro Temp Brian Bingman, R-Sapulpa, briefed Capitol reporters on the legislation at mid-morning.
The Senate version of H.B. 2032 would bring the top income tax rate down to 4.95 percent, from the present 5.25 percent levy.
The measure approved in the House made no changes to existing tax credits and exemptions — a sticking point in past deliberations on proposed income tax cuts — and would reduce the top rate to 5.0 percent.
However, the new Senate committee version would eliminate transferability for a total of five tax credits; making those credits refundable, instead, at an 80 percent rate. The Senate committee version would also put a sunset on the credits by the year 2020.
Whereas the House version of the bill would make the income tax reduction of .25 percent effective on July 1, 2013, the new Senate version would not enact the tax reduction of .30 percent until Jan. 1, 2015.
Advocates of the changes contend the delay in the effective date of tax reduction would leave money to put into public education (K-12) this year. The average benefit for taxpayers in he House plan is $39 a year; in the Senate plan it is $80 annually.
The House version’s annualized estimate for total tax reductions is $120 million; in the Senate version, legislative staff projects a $169 million annual reduction upon implementation.
Two weeks ago, when the state Chamber of Commerce endorsed the House income tax cut, sponsored by Speaker T. Shannon, R-Seminole, supporters dubbed it the “Shannon-Fallin tax cut.” Senate staffers today were referring to the committee substitute a “the Bingman-Shannon tax cut.”