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Bill

Bill

SB 538

FINANCE-TECH

104th Regular Session Introduced by Don Harmon

SB 538 aimed to offer tax deductions for qualified business income, helping small businesses and self-employed individuals reduce their tax burden and stimulate economic growth.

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WeVote Research Nonpartisan
Bill Summary · SB 538

Summary of SB 538: Provide Income Tax Deduction for Qualified Business Income

Bill Overview

Bill Number: SB 538
Title: Provide income tax deduction for qualified business income
Status: Died in Process
Introduced: November 11, 2024
Classification: Bill
Subject: Revenue, State, Taxation (Generally), Taxation--Individual Income

Purpose and Intent

The primary intent of SB 538 was to establish an income tax deduction for individuals and entities earning qualified business income (QBI). This measure aimed to provide financial relief to small businesses and self-employed individuals by allowing them to deduct a portion of their business income from their taxable income, thereby potentially lowering their overall tax burden.

Key Provisions

  • Income Tax Deduction: The bill proposed a specific deduction for qualified business income, which would have allowed eligible taxpayers to reduce their taxable income by a defined percentage of their QBI.
  • Eligibility Criteria: While specific eligibility criteria were not detailed in the provided information, such provisions typically include requirements related to the type of business entity and the nature of the income.
  • Implementation Timeline: The bill did not specify an implementation date, as it did not progress past the committee stage.

Impact

  • Affected Parties: If enacted, the bill would have primarily benefited small business owners, self-employed individuals, and certain pass-through entities (like partnerships and S corporations) that report income on individual tax returns.
  • Economic Implications: By reducing the tax burden on qualified business income, the bill aimed to stimulate economic growth by encouraging reinvestment in businesses and potentially creating jobs.

Legislative Process and Timeline

  • Introduced: November 11, 2024
  • First Reading: March 25, 2025
  • Referred to Committee: March 25, 2025
  • Hearing in Committee: March 27, 2025
  • Fiscal Note Requested: March 25, 2025
  • Tabled in Committee: April 1, 2025
  • Missed Deadline for Revenue Bill Transmittal: April 7, 2025
  • Died in Process: May 23, 2025

The bill faced a series of legislative hurdles, including being tabled in committee and ultimately dying in process without further action or approval.

Conclusion

SB 538 represented an effort to provide tax relief to small businesses through a deduction for qualified business income. However, due to procedural challenges and the bill's eventual failure to advance, it did not become law. The proposed changes would have had significant implications for individual taxpayers engaged in business activities, but the opportunity for these benefits was not realized.

Compiled from official sources — confirm details with the bill’s official record.

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