H97 - 2015 Appropriations Act, Secs. 32.13, 32.14, 32.14A, and 32.15: Corporate Income and Franchise Tax Changes (SL 2015-241)

Overview: Secs. 32.13, 32.14, 32.14A, and 32.15 of S.L. 2015-241, as amended by Secs. 10.1 and 10.2 of S.L. 2015-268, make the following corporate income tax and franchise tax changes:

• Reduces the corporate income tax rate to 3%, effective for the taxable year that begins January 1 following the fiscal year in which the amount of net General Fund tax collected equals or exceeds $20,975,000,000.
• Expands the corporate income tax base by eliminating antiquated, obsolete, and special tax deductions, effective for taxable years beginning on and after January 1, 2016.
• Phases-in single sales factor apportionment over three years, starting with taxable years beginning on or after January 1, 2016 and directs the Revenue Laws Study Committee to study market-based sourcing.
• Simplifies the calculation of the franchise tax by conforming more closely to net worth as determined by generally accepted accounting principles, effective for franchise tax returns due in 2017. Increases the minimum franchise tax from $35 to $200 and increases the maximum franchise tax on holding companies from $75,000 to $150,000; both rate changes are effective for franchise tax returns due in 2017.
• Repeals the State privilege tax on banks, effective June 30, 2016.