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House Taxation Committee tables bill to create interest-income deduction
Summary
The House Taxation Committee tabled House Bill 132, which would have allowed an 'interest received' deduction for individual income tax reporting interest on Form 1099; members said the benefit mainly accrues to large savers and the bill failed a roll-call before a subsequent motion to table passed 21-0.
The House Taxation Committee on the morning agenda took executive action on House Bill 132, a proposal from Rep. T. Falk to create an "interest received" deduction for individual income tax filers that would require interest income to be reported on Form 1099 and limit the deduction by filing status.
Committee members expressed skepticism about who would benefit. An unidentified representative who spoke during discussion illustrated the math, saying the bill would mainly help taxpayers with very large certificates of deposit: “To get the full benefit of this bill, you'd have to have a CD of over $100,000 at 5% … If you only had a $5,000 CD, your interest benefit … would be $12.5,” and announced an intention to vote no. Representative Elverum asked whether the provision could be tied to tax brackets to better target savings accounts; he said no amendment had been offered and said he would vote no.
After discussion the committee conducted a roll-call vote; the chair declared the bill failed. Members then considered a substitute motion to table HB132. That motion carried on a committee voice vote with proxies recorded; the clerk recorded the tabling vote as 21 ayes and 0 nays. The bill is now tabled with no further committee action recorded today.
House Bill 132: sponsor T. Falk; subject — income taxation/interest deduction. Next steps: tabled by the House Taxation Committee; no immediate schedule for return was announced.
