This bill amends the Business Profits Tax regulations regarding the maximum award of tax credits for overpayment of due taxes. The current law allows a credit carryforward limit of 500%, which is set to decrease to 250% for taxable periods ending on or after December 31, 2029, and to 100% for those ending on or after December 31, 2031. The proposed changes will increase the credit limits to 450% for 2029, 400% for 2031, and introduce new limits of 350%, 300%, 250%, 200%, and 150% for taxable periods ending in 2033, 2035, 2037, 2039, and 2041, respectively. The bill also specifies that any overpayment exceeding these limits will be refunded to the taxpayer.

The fiscal impact of this bill is projected to increase net revenue for the state by an estimated $54.1 million through fiscal year 2044, as it reduces the amount of refunds issued from the General Fund and Education Trust Fund. The Department of Revenue Administration indicates that while the exact future impact is uncertain, the proposed limits would have resulted in significantly fewer refunds for taxpayers with overpayments exceeding the new thresholds. The bill is set to take effect 60 days after its passage.

Statutes affected:
Introduced: 77-A:7