HB 1250 Summary

• Eliminates the financial institutions tax (chapter 57-35.3) effective for taxable events after June 30, 2014, transitioning financial institutions to corporate income tax treatment under chapter 57-38.

• Reduces corporate income tax rates: first $50,000 at 1.26%, $50,000-$100,000 at 2.12%, and income over $100,000 at 2.87%.

• Reduces individual income tax rates across all filing statuses with new brackets and rates, starting at 1.13% for lowest income brackets.

• Allows subchapter S corporations that were financial institutions to elect corporate tax treatment and carry forward unused credit carryovers and net operating losses under prior law.

• Increases state aid distribution fund allocations to political subdivisions from 40% to 43.5% of sales and use tax collections.