H961 - Tax Modernization and Simplification

• Repeals Article 3 of Subchapter I of Chapter 105 (franchise tax) effective for taxable years beginning January 1, 2014.

• Reduces state sales tax rate from 4.75% to 3.5% and creates new sales tax on service providers at 3.5% with exemptions for business services and medical services, effective January 1, 2014.

• Changes personal income tax from progressive tax brackets (6%-7.75%) to flat 6% tax rate and increases standard personal exemption to $6,000 for all filers, effective January 1, 2014.

• Reduces corporate income tax rate from 6.9% to 4% and eliminates various corporate tax deductions and credits, effective January 1, 2014.

• Reduces motor fuel excise tax from 17.5¢ per gallon plus variable component to 13.125¢ per gallon plus lower variable component, effective January 1, 2014; creates $1,000 tax credit for employers hiring registered apprentices for up to four years.