Analysis Complete for Senate Bill 6017

Office of Financial Management

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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.