HB 1141 Summary

• Eliminates individual income tax for single filers and heads of household earning less than $20,000 annually, and joint filers earning less than $40,000 annually, effective for tax years beginning after December 31, 2023.

• Reduces tax rates for low- and moderate-income earners by scaling marginal tax rates more slowly across income brackets up to $75,000.

• Projected to cost $198 million in foregone revenue based on 2016 data, as lower-income filers contributed only 27.39% of total income tax revenue while higher earners making over $75,000 generated 72.61%.

• Revenue loss offset through tax increases: 0.15% increase to general excise tax, 0.50% increase to transient accommodations tax, and modest increases to liquor and cigarette taxes which had not been increased in over ten years.

• Effective date: July 1, 2023.