The bill amends taxation laws for banks, specifically Sections 44-14-13 and 44-14-14.1, to include new provisions for the deduction of ordinary and necessary business expenses, with certain exceptions. It also addresses the addition of business expense transactions between a taxpayer and members of a unitary business to the taxpayer's net income, except when it would cause duplicate taxation. The bill modifies the apportionment of income to the state using a taxpayer's receipts, property, and payroll factors, and allows for alternative methods of apportionment if the standard provisions do not fairly represent the taxpayer's business activity in the state. A deletion is made for tax years ending prior to January 1, 2025, concerning the allocation and apportionment provisions.

Furthermore, the bill introduces a new section allowing banking institutions to elect an alternative method of allocating and apportioning net income using a receipts factor from January 1, 2025, and mandates a combined reporting study for banking institutions that are part of a unitary business. It also establishes penalties for non-compliance with reporting requirements and requires the tax administrator to submit a report by March 15, 2027, on the implications of changing to a combined method of reporting. The bill outlines the general duties of the state controller and specifies that excess revenues from fiscal year 2023 shall not be transferred to the supplemental state budget reserve account. The effective dates for the various sections of the bill are January 1, 2025, for Sections 1 and 2, and upon passage for Section 3.

Statutes affected:
7927  SUB A: 35-6-1