HB 4621 Summary

• Establishes an income tax rate of 4.25% for individuals (effective October 1, 2012) with automatic rate reductions beginning January 1, 2023 if general fund revenue growth exceeds inflation.

• Creates a revenue cap mechanism based on 2020-2021 fiscal year general fund/general purpose revenue adjusted annually by 1.425 times the inflation rate, with excess revenue triggering proportional tax rate reductions.

• Directs the state treasurer, senate fiscal agency director, and house fiscal agency director to make annual revenue growth determinations by January revenue estimating conferences starting January 2023.

• Continues requirement that 1.012% divided by the income tax rate be deposited into the state school aid fund (changing from gross to net revenue collections beginning January 1, 2018).

• Adds 3.5% of average farmland tax credits claimed over the preceding 3 fiscal years to be deposited into the agricultural preservation fund beginning October 1, 2016, and repeals Section 272 effective January 1, 2018.