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Bill

A 1971

Raises the tax rate on corporate income; increases the state conformity to federal taxation of corporate profit shifting; and imposes an additional tax on individual business income

2025 Regular Session Introduced by George Alvarez and 28 co-sponsors

Bill A 1971 raises corporate tax rates and imposes an extra tax on individual business income to boost state revenue and ensure fair contributions from businesses.

REFERRED TO WAYS AND MEANS
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WeVote Research Nonpartisan
Bill Summary · A 1971

Summary of Bill A 1971

Bill Number: A 1971
Title: Raises the tax rate on corporate income; increases the state conformity to federal taxation of corporate profit shifting; and imposes an additional tax on individual business income
Status: Referred to Ways and Means
Introduced: January 14, 2025
Classification: Bill

Purpose and Intent

Bill A 1971 aims to modify the state's tax structure by increasing the tax rate on corporate income, enhancing conformity with federal taxation regulations regarding corporate profit shifting, and introducing an additional tax on individual business income. The intent of the bill is to generate additional revenue for the state while ensuring that corporations and individual businesses contribute fairly to the state's fiscal responsibilities.

Key Provisions

  1. Increased Corporate Tax Rate:

    • The bill proposes a higher tax rate on corporate income, although specific percentage increases are not detailed in the provided information.

  2. Enhanced State Conformity:

    • The legislation seeks to align state tax laws more closely with federal regulations concerning corporate profit shifting. This could involve stricter rules on how corporations report and allocate their profits, aiming to reduce tax avoidance strategies.

  3. Additional Tax on Individual Business Income:

    • An additional tax will be imposed on individual business income, which may affect sole proprietors and pass-through entities. The specifics of this tax, including rates and thresholds, are not outlined in the current summary.

Impact

  • Affected Parties:

    • Corporations: Businesses operating within the state will face higher tax obligations, which may impact their profitability and investment decisions.
    • Individual Business Owners: Sole proprietors and other individual business entities will be subject to an additional tax, potentially affecting their net income and financial planning.

  • State Revenue:

    • The bill is expected to increase state revenue, which could be allocated to various public services and infrastructure projects.

Procedural Aspects

  • Current Status: The bill was referred to the Ways and Means Committee on January 14, 2025, where it will undergo further review and discussion.
  • Related Legislation:
    • A 3690: A prior-session bill that may have similar objectives or provisions.
    • S 953: A companion bill in the Senate, indicating that discussions on this topic are occurring in both chambers of the legislature.

Conclusion

Bill A 1971 represents a significant shift in the state's approach to corporate and individual taxation. By increasing tax rates and enhancing conformity with federal tax laws, the bill aims to ensure a fairer tax system while boosting state revenue. Stakeholders, including corporations and individual business owners, should closely monitor the bill's progress and potential implications for their financial obligations.

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

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