HB 1616 Summary

• Implements a new progressive tax rate structure for individual income tax starting January 1, 2013, with rates ranging from 1.5% for income under $2,000 to 9% for income over $50,000, replacing the prior graduated tax table system.

• Eliminates the federal income tax deduction for individual taxpayers after December 31, 2012, which previously allowed deductions up to $5,000 for single returns or $10,000 for combined returns.

• Establishes a new tax credit system for tax years beginning January 1, 2013, providing credits of $150 for single/married filing separately filers with income under $30,000 and head of household/married filing jointly filers with income under $60,000.

• Creates a sliding scale tax credit schedule for taxpayers with higher incomes ($30,000-$50,000 for single filers; $60,000-$80,000 for joint filers) that provides credits per eligible person, ranging from $143 to $7 depending on income level.

• Makes this act subject to voter approval through a referendum election held on the Tuesday following the first Monday in November 2012, becoming effective only if approved by a majority of votes cast.