SB 549 Summary

• Creates new income tax brackets for individuals, trusts, and estates effective January 1, 2023, with rates ranging from 0% to 4.7% based on net income levels, with the highest bracket (4.7%) applying to income over $87,000.

• Implements a phase-out bracket for taxpayers with net income between $87,001 and $91,300, allowing them to deduct bracket adjustment amounts that gradually decrease from $430 to $0 to smooth the tax transition.

• Reduces the corporate income tax rate on net income exceeding $25,000 from 5.3% to 5.1% for both domestic and foreign corporations effective January 1, 2023.

• Requires the Secretary of the Department of Finance and Administration to adjust all income tax tables annually for cost-of-living changes, rounding to the nearest $100, while maintaining tax rates for each bracket.