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Senate clears substitute to clarify corporate tax factor by removing sales from analysis
Summary
Lawmakers substituted and advanced SB 29 to resolve ambiguity in corporate-income tax factor determinations, removing sales from factor analysis and classifying firms by property-and-payroll share to create predictable tax treatment; sponsors expect a reduced fiscal note.
Senators approved a second substitute to Senate Bill 29 aimed at resolving ambiguity in corporate income tax factor calculations by removing the sales factor from the analysis in specified cases and by classifying taxpayers based on whether property plus payroll exceed 50 percent of economic-activity attribution.
Sponsor Senator Harper said the measure creates a predictable approach for both taxpayers and the tax commission and implements single-sales-factor policy while eliminating opportunities to 'game' the system. "This bill resolves an ambiguity in our corporate income tax code," he said, explaining the change would classify taxpayers and prevent frequent switching among factor allocation options.
The floor adopted two technical corrections and a coordinating clause; the sponsor said the fiscal note likely will decline as a result of those fixes and that analysts will complete an updated fiscal note before third reading. The second substitute was advanced to third reading on a roll-call recorded as 20 yes, 4 no, 5 absent.
Sponsors framed the measure as technical clarification to improve predictability for tax administration and compliance; senators asked for clarification on the fiscal note timing and expected effect, which the sponsor said should be available prior to third reading.
