Analysis Complete for Senate Bill 6017

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SB 6017, titled AN ACT Relating to providing progressive tax reform by imposing an excise tax on annual compensation in excess of one million dollars, 10 year analysis complete.

The Office of Financial Management has identified this bill as requiring a ten-year projection of increased cost to the taxpayers or affected fee payers.

Ten-year projection:

Fiscal Year		Excess Compensation Tax
2020		$ 71,989,496
2021		291,413,481
2022		305,627,663
2023		318,756,601
2024		325,131,733
2025		331,634,368
2026		338,267,055
2027		345,032,396
2028		351,933,044
2029		358,971,704
Total:		$ 3,038,757,541

PROPOSAL:

A tax based on annual compensation totaling $1 million or more is imposed.  Annual compensation means the total of wages and self-employment income. 

The Employment Security Department administers the tax.

If total annual compensation is:

-- Between $1 million and $5 million, the rate is 5 percent.

-- Between $5 million and $10 million, the rate is 7.5 percent.

-- Greater than $10 million, the rate is 10 percent.

The tax amount is rounded to the nearest penny.

Wages paid to federal employees are exempt from the tax.

Revenues are deposited into the state general fund.

EFFECTIVE DATE:

January 1, 2020

This legislation results in no revenue impact to taxes administered by the Department of Revenue.