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CPA warns Jefferson County to prepare for major tax-law changes, urges data-driven MUST process
Summary
Andrew Lamb of Steel Nicholson Company briefed the council on Senate Enrolled Act 1 (SEA1) and HA1210, outlining options under the optional MUST task force, phased homestead and 2%/3% property-deduction changes, and the business personal property exemption change to $2 million that will reshape the tax base and local budgeting choices.
Andrew Lamb, a certified public accountant with Steel Nicholson Company, told the Jefferson County Council on June 9 that recent state legislation will substantially change how local income and property taxes work and urged the county to prepare methodically.
"The county will now have a lot of influence over how the new local income taxes are set up and at what rates," Lamb said, describing the Municipal Unit Strategic Task Force (MUST) created under HA1210. He advised the council that convening the MUST before the October 1 deadline would allow local officials — county council members, the county auditor and fiscal officers from municipalities — to recommend how local income taxes are allocated beginning in 2029.
Lamb explained three major categories of change tied to what he referenced as Senate Enrolled Act 1: shifts in local income tax administration that allow some municipalities to set their own municipal rates (up to statutory caps), a phase‑in of a new homestead credit and supplemental homestead deduction changes that will shrink taxable assessed values over time, and a large expansion of the business personal property exemption — raising the filing exemption from $80,000 to $2 million for taxes payable beginning 2027. "That will have downward pressure on the tax base," Lamb said, noting that changes to the 2% and 3% property classes and the removal of the 30% business personal property floor will further reduce taxable assessed values.
Lamb urged caution and more data: "Currently the data doesn't even exist to be able to do those calculations. We should have that soon," he said, describing expected Department of Revenue and Department of Local Government Finance guidance. He sketched a conservative estimate that the county tax base could decline on the order of a few percentage points annually as the deductions phase in, which would interact with levy growth limits and the circuit‑breaker mechanism to change how much revenue is collectible.
On tools to respond, Lamb recommended pursuing growth strategies — redevelopment commissions, tax abatement and state programs — and careful scenario planning before making a rushed MUST recommendation. He said the county should gather data from state agencies, model replacement rates to preserve existing service funding (including jail bond payments), and closely track forthcoming DLGF guidance.
What’s next: Lamb said the county should expect state guidance and dataset releases in the coming weeks and recommended staged work to model options and their impacts ahead of the October 1 decision date.
Provenance: Presentation begins at SEG 586 and continues through SEG 1992.
Speakers quoted: Andrew Lamb, CPA (Steel Nicholson Company).
