MEMORANDUM
To:
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Blue Ribbon Commission on Tax Reform
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From:
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Staff
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Re:
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Items Still Under Consideration
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Date:
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November 18, 2012
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Dear Commission, below see the tax reform proposals that are still under consideration:
Individual Income Taxes
Proposal # 1: Add additional tax rates for higher income individuals on the income tax
Proposal # 2: Change the reference to the Federal Code from December 31, 2006 to December 31, 2012
Proposal # 4: Eliminate or reduce the income tax
Proposal # 6: Enact a state Earned Income Tax Credit
Proposal # 7: Implement a tax deduction for 529 college savings plan contributions
Proposal # 8: Limit itemized deductions
Proposal # 9: Make taxable income equal to the federal Adjusted Gross Income (AGI) less a significant standard deduction and tax credit for low income households
Proposal # 10: Tax Retirement income
Proposal # 11: Remove the spousal division on income and deductions
Corporate Taxes
Proposal # 14: Create an R&D Tax Credit
Proposal # 28: Exempt business-to-business transactions, including the purchases of business inputs used for the manufacture of goods
Sales and Excise Taxes
Proposal # 29: Apply transient room taxes to entire hotel accommodation price
Proposal # 30: Apply sales tax to pre-written computer software
Proposal # 32: Charge sales tax only on materials used to build a manufactured home, or 50 percent of the retail cost
Proposal # 34: Exempt mail charges for direct mail from sales tax
Proposal # 35: Extend sales tax to the auction price of a thoroughbred horse
Proposal # 36: Remove the sales tax from livestock antibiotics
Proposal # 38: Impose a gross receipts tax of between 1 and 3 percent on both residential and business utilities
Proposal # 39: Impose a gross receipts tax of up to 3 percent for residential utilities
Proposal # 41: 1) Increase collection of out-of-state and Internet sales; 2) Support federal legislation allowing states to require remote firms to collect sales tax
Proposal # 42: Increase the tax rate on cigarettes and other tobacco products
Proposal # 43: Raise the sales tax
Proposal # 46: Review the sales and use tax on equine products
Property Taxes
Proposal # 47: Allow school districts to maintain the current property tax assessment rate even when the new assessment surpasses the four percent cap
Proposal # 48: Create a tax credit for the bourbon industry to offset the property tax on stored barrels of bourbon, without reducing local property taxes to school districts
Proposal # 49: Eliminate personal property taxation
Proposal # 50: Exempt Inventory from Property Tax
Proposal # 51: Freeze the state property tax rate at 12 cents per $100 of value
Proposal # 52: Increase funding for PVA offices, or create a dedicated funding stream for PVA offices
Proposal # 55: Identification of public service companies for taxation
Proposal # 57: Amend the Constitution to eliminate the homestead exemption for those over 65 while putting in place a statutory means-tested property tax circuit breaker for those over 65
Proposal # 58: Remove the HB44 recall provisions for local and school real property taxes
Severance Taxes
Proposal # 61: Clarify the definition of “gross value” under severance tax
Other Taxes / Issues
Proposal # 62: Eliminate Tax Increment Financing programs (TIFs)
Proposal # 63: Establish a Kentucky estate tax with modest exemption limits
Proposal # 64: Impose the Pari-mutuel tax on advance deposit wagers made by Kentucky residents on live races conducted at Kentucky race tracks
Proposal # 65: Sunset or provide regular review of tax incentives
Proposal # 66: Broaden the hospital provider tax to include doctors
Road Fund Issues
Proposal # 67: Implement a trade-in credit for new car purchases
Proposal # 70: Modify the index in the gas tax rate to tie it to the inflation rate of transportation infrastructure construction costs
Local Taxation Issues
Proposal # 71: Allow all classes of local governments to have a local option food and beverage tax
Proposal # 72: Amend the Constitution to allow a local general sales tax
Proposal # 73: Switch to a statewide restaurant tax of one percent instead of localities having different restaurant taxes
Proposal # 74: Allow single sales factor apportionment as a defined option to the city/county business tax calculation
Simplicity, Compliance and Tax Administration
Proposal # 76: Allow non-renewal of professional licenses, driver’s licenses and vehicle registration if taxpayers are delinquent on state taxes to improve collections
Proposal # 80: Create a uniform occupational tax statewide form
Proposal # 86: Installment payment agreement clarification
Proposal # 87: Make LLC members personally responsible for all taxes & make corporate officers personally liable for motor vehicle usage tax
Proposal # 89: Review the disparity in the tax code and law between documented and undocumented boats
Proposal # 90: Sales tax successor liability to enhance the Department of Revenue’s collection efforts
Proposal # 93: Return to a balanced interest rate on taxes owed to and by the state
Proposal #96: Eliminate the estate tax
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