HB5478 Summary

• Reduces the individual income tax rate from 4.95% to 4.85% effective January 1, 2023, with a transitional rate of 4.95% for taxable years beginning before January 1, 2023 and ending after December 31, 2022.

• Updates the pass-through entity tax rate to match the individual income tax rate (currently 4.95%, becoming 4.85%), allowing partnerships and S corporations to elect entity-level taxation.

• Maintains existing tax credits and surcharges including investment credits, enterprise zone credits, research and development credits, and surcharges on gaming and medical cannabis businesses.

• Takes effect immediately upon becoming law.