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Committee hears divergent forecasts as lawmakers weigh whether to conform to federal 'OB3' tax changes
Summary
A legislative revenue assessment committee heard economists and tax officials describe a tighter revenue outlook and differing assumptions about corporate-tax timing related to federal SALT/’One Big Beautiful Bill’ (OB3) changes; the committee will compile individual member projections and vote on a recommendation tomorrow.
A joint revenue assessment committee heard a series of economic and tax presentations Wednesday that left members facing two central choices: whether to count a projected drop in corporate income receipts as a structural hit or as a timing/behavioral effect tied to federal SALT changes, and whether to conform to the federal “One Big Beautiful Bill” (OB3), which the Tax Commission estimates could reduce state revenues by $115 million–$192 million depending on how the legislature conforms.
Erin Phipps, an economist at the Division of Financial Management, summarized the executive branch’s January forecast and explained a change in how DFM will report sales‑tax‑related accruals. "We are including the tax relief fund transfer in sales tax accruals," Phipps said, adding that the $330 million sales‑tax…
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