Senate Bill No. 373 introduces a new personal income tax deduction for stipends received by volunteer firefighters, volunteer fire police officers, and volunteer ambulance members. The bill amends current law by repealing subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 and replacing it with provisions that allow these stipends to be deducted from gross income for state tax purposes. This change is set to take effect on January 1, 2027, and will apply to taxable years commencing on or after that date. The intent of this legislation is to acknowledge and support the vital contributions of volunteers in emergency services by providing them with a financial incentive through tax deductions.

In addition to the new deduction for volunteer service stipends, SB373 includes various amendments to the tax code, such as establishing a state personal income tax deduction for certain payments received by volunteer firefighters and EMS personnel, allowing deductions for first-time homebuyer savings accounts, and clarifying the treatment of various income sources. The bill also introduces provisions for taxpayers licensed under specific marijuana-related chapters to claim ordinary and necessary expenses, as well as ensuring that certain financial assistance programs are not included in gross income for state tax purposes. Overall, the bill aims to provide tax relief and clarity for various groups, with a projected General Fund revenue loss of $250,000 starting in FY 2028.