Senate passes SB 180 to raise mineral withholding and adjust retirement interest treatment

Senators advanced and passed Senate Bill 180 on Feb. 25, a tax‑code package that raises mineral withholding and adjusts how interest income affects retirement‑income phase‑outs.

Sponsor Senator Hedrick told the chamber the bill “does not increase the tax. It just increases the amount of withholding,” explaining the measure raises the mineral withholding rate from 4% to 5% to reduce collection problems from nonresident payees. Hedrick also said the bill changes retirement income calculations by including state interest with federal interest when determining whether a retired couple hits the statutory phase‑out (he cited a $32,000 threshold for the illustrative means test).

Hedrick said the changes were intended to close an administrative gap that made some revenues difficult to collect and that the measure contains largely technical clarifications in other places — for example, that the individual and corporate income‑tax credit for clean‑burning fuels applies to in‑state tax liability only.

On fiscal impacts, the sponsor characterized the net effect as a small positive for the Uniform School Fund. A floor exchange referenced a fiscal-note figure of roughly $375,000 in one line and another staff reference to $750,000 annual impact; Hedrick framed the increase as modest relative to approximately $1 billion in state income tax collections.

Under suspension of the rules, the Senate read SB 180 for final passage and conducted a roll‑call vote. The clerk announced: “Senate bill 180 shows 25 ayes, 2 nays, 2 absent.” The Senate directed the bill to the House for consideration.

What’s next: SB 180 will proceed to the House for further action; the Senate record carries the roll call and the fiscal notes referenced on the floor.

Quote: “It does not increase the tax. It just increases the amount of withholding,” — Senator Hedrick, sponsor of SB 180.