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Panel approves $200M income tax credit package aimed at middle-income households
Summary
SB 5 46, an income tax credit package with an initial fiscal estimate of about $200 million, cleared the Senate Finance and Claims Committee 18–4; the bill targets households in the $60,000–$100,000 federal adjusted income band and DOR testified it would require approximately three new FTEs to administer at current claim volumes.
Senate Finance and Claims approved SB 5 46, a targeted income tax credit package that sponsors said would direct relief toward middle-income households and generate multiplier effects for the state economy. The committee voted 18–4 in executive action.
Senator Dave Fern, sponsor, described the package and said the fiscal note is approximately $200 million with the largest benefits expected for joint filers with federal adjusted incomes between about $60,000 and $100,000. "We're trying to figure out the biggest bang for the buck with a $200,000,000 income tax reduction," Fern said, adding that the measure was tailored to benefit workers who will likely spend the income back into local economies.
Department of Revenue staff answered technical and implementation questions. Jake Ford said the staffing request in the fiscal note—three FTEs—was based on an assumption of about 75,000 claims and that an updated claims estimate would drive any change to the FTE request.
Committee members asked about statutory language (for example, whether a 'one-time credit' meant one credit per tax year); DOR agreed the department's reading was that each taxpayer would receive the credit once per tax year. Members also debated distributional effects and whether the policy could be gamed at different income levels; sponsors and staff said they expected further evaluation and possible interim review.
SB 5 46 passed out of committee and will advance for further consideration.
