Vote Smart's Synopsis:

Vote to pass a bill that reduces tax rates for corporations and personal business income.

Highlights:

• Authorizes an individual to deduct a certain amount of “business income” from their federal adjusted gross income for all tax years beginning on or after January 1, 2014, if the total state income tax revenues received in the fiscal year preceding the current year is greater than or equal to the total income tax revenues from the 2011-2012 fiscal year (Sec. A).

• Reduces the corporate income tax rate for all tax years beginning on or after January 1, 2014, if the total state income tax revenues received in the fiscal year preceding the current year is greater than or equal to the total income tax revenues from the 2011-2012 fiscal year (Sec. A).

• Specifies that if the total income tax revenues received in the fiscal year preceding the current year is less than the total income tax revenues from the 2011-2012 fiscal year, then the amount of deductible business income and the corporate tax rate will be the same as it was in the preceding year (Sec. A).

• Specifies that for the first 5 years in which an individual is authorized to deduct a certain percentage of business income from their federal adjusted gross income, the percentage of deductible business income will be as follows (Sec. A):
• 10 percent in the first year;
• 20 percent in the second year;
• 30 percent in the third year;
• 40 percent in the fourth year; and
• 50 percent in the fifth year.

• Specifies that for the first 5 years in which a corporate tax rate reduction is authorized, the corporate income tax rate will be as follows (Sec. A):
• 5.625 percent in the first year;
• 5 percent in the second year;
• 4.375 percent in the third year;
• 3.75 percent in the fourth year; and
• 3.125 percent in the fifth year.

• Prohibits an increase in the percentage of deductible business income or a reduction in the corporate income tax rate as provided in this bill from being decreased (Sec. A).

Full Bill Text