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Committee advances bill to eliminate several long-standing tax discounts; fiscal note estimates $467,700/year
Summary
The committee advanced SB164 to eliminate selected tax discounts identified by Legislative Finance; the Department of Revenue's fiscal note estimates the measure would raise about $467,700 annually, including removal of a cigarette-stamp discount that currently benefits a small set of firms.
Sen. Kelly Merrick urged the House Finance Committee May 15 to consider Senate Bill 164, a measure to eliminate selected tax discounts and credits identified in the Legislative Finance Division's indirect expenditure report. Merrick said the changes would be a modest revenue-recapture effort to fund state priorities and described the selections as noncontroversial recommendations.
Staff described several provisions. Sorsha Hazleton, staff to Sen. Merrick, explained that sections 3 and 4 would eliminate a cigarette-stamp tax discount created in 2003 to reimburse businesses for purchasing stamp affixing equipment. Hazleton said the industry purchased the equipment more than 20 years ago and that eight companies currently benefit from the discount at roughly $40,000 per company per year; eliminating it would recover about $308,000 annually.
Dan Stickel, chief economist at the Department of Revenue, presented the published fiscal note and said the department estimates an increase in state revenues of $467,700 per year if the bill were enacted, and that the fiscal note was published March 4, 2026.
Committee members asked whether the targeted credits remain effective at achieving their original purposes and whether the chosen items are financially self-sustaining. Staff said many credits date back two decades and that businesses have developed filing processes around them; Legislative Finance recommended termination for several credits the division now regards as costs of doing business.
Representative Froggy moved SB164 out of House Finance with individual recommendations and an attached fiscal note. The committee recorded no objections and authorized Legislative Legal to make technical or conforming changes.
Next step: SB164 was moved out of committee as version 34LS0763I and will proceed through the legislative process with the attached fiscal note and committee recommendations.
