Detailed Multistate Development
In spite of the prohibition in the American Rescue Plan Act against using federal relief funds to adopt tax cuts, several states have recently adopted legislation reducing corporate income tax rates. In Nebraska, LB 432 (signed May 26, 2021) provides that for taxable years beginning on or after January 1, 2022, and before January 1, 2023, the rate applicable to taxable income in excess of $100,000 is reduced from 7.81 percent to 7.5 percent. For taxable years beginning on or after January 1, 2023, the highest rate is further reduced to 7.25 percent on all taxable income in excess of $100,000. The corporate income tax rate on the first $100,000 of income remains at 5.58 percent. The bill further states that the Legislature intends to enact future legislation to lower the tax rate applicable to income in excess of $100,000 to 7.00 percent for taxable years beginning on or after January 1, 2024, and before January 1, 2025, and to 6.84 percent for taxable years beginning on or after January 1, 2025. In Oklahoma, House Bill 2960 reduces the corporate income tax rate from 6.0 percent to 4.0 percent for tax years beginning after December 31, 2021. Finally, Idaho House Bill 380, signed into law on May 10, 2021, reduces Idaho’s corporate income tax rate from 6.925 percent to 6.5 percent effective retroactively to January 1, 2021. Legislation is also in play in North Carolina (House Bill 334) that would slowly phase out the state’s corporate income tax through 2027 and the New Hampshire Senate recently passed a budget that includes business tax cuts. Please stay tuned to TWIST for future corporate rate changes.
This Week's Developments
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