Additional Capital Gains Tax Cut Bill Passes House Committee
by March 19, 2015 9:53 am 136 views
A bill that will put back exemptions on the state’s capital gains tax rates cleared a House committee Thursday, with supporters saying it will create jobs.
The House Revenue and Taxation Committee approved House Bill 1402, sponsored by Rep. Matthew Shepherd, R-El Dorado.
Shepherd, who filed the bill Feb. 18, said in his original bill that he wanted to reinstate the 50% rate that was set during the 2013 legislative session.
However, Shepherd told the committee that the 50% rate will be accomplished gradually.
“It will put back the exemptions. It will be accomplished but it will take a little more time,” Shepherd said.
The legislature approved a 40% exemption rate earlier this session, with officials looking for additional opportunities to cut the tax.
The committee approved an amendment from Rep. Joe Jett, D-Success, who also chairs the committee.
The amendment would move the 40% rate to 45%, retroactive to Feb. 1, 2015. From there, the exemption rate would go from 45% to 50%, effective July 1, 2016.
Also, a $10 million exemption amount would remain in place.
Shepherd said the amendment and bill would put back some certainty in the state tax code, especially for businesses.
Rep. Vivian Flowers, D-Pine Bluff, who spoke against the bill, said she was concerned over the tax cut going to upper-income taxpayers and no funding for pre-kindergarten programs.
However, Rep. Charlie Collins, R-Fayetteville, told Flowers that a capital gains reduction would help create jobs.
“When you invest, you create jobs,” Collins said, noting the additional jobs will help people at the lower end of the financial spectrum.
Jett later told Flowers that a bill to help lower-income taxpayers, sponsored by Rep. Warwick Sabin, D-Little Rock, will go before the committee next week.
Tim Leathers, an official with the Department of Finance and Administration, said the bill from Shepherd would have a $6 million impact on FY 2016 and a $11.8 million impact on FY2017 on the state’s budget.
The bill now heads to the full House.