HB 2508 Summary

• Modifies individual income tax rates effective January 1, 2016, changing the top marginal rate from 5.50% to 5.25% for 2016 and subsequent tax years (contingent on revenue determination by State Board of Equalization).

• Reduces corporate income tax rate from 6% to 5% for tax year 2016 and subsequent years, contingent upon State Board of Equalization finding that estimated revenue growth meets specified thresholds.

• Establishes revenue determination procedures requiring the State Board of Equalization to compare General Revenue Fund growth against the estimated revenue loss from tax rate decreases in December and February meetings of each year until rates become effective.

• Repeals Section 2355.1E (prior tax rate reduction provisions from 2013) and establishes new Sections 2355.1F and 2355.1G to implement the revenue-contingent tax rate decreases.

• Effective January 1, 2016, with implementation of individual and corporate rate decreases contingent on State Board of Equalization determinations regarding revenue sufficiency.