Committee advances SB 313 to resolve military-retirement tax exclusion issue; DFA estimates $66,000 impact

Senator Dismain presented SB 313 to the Senate Revenue & Tax Committee and reported that a fiscal-impact statement had been received estimating a minimal revenue impact of about $66,000. The bill amends a provision in the state's tax code that had the unintended consequence of preventing eligible filers from receiving the full $6,000 exclusion for military and other retirement benefits simultaneously.

Paul Gering of the Department of Finance and Administration (DFA) told the committee that the problem arose after a 2017 legislative change that provided a full exemption for military and survivor benefits. "In the 02/2017 session... we provided a full exemption for military and survivor benefits," Gering said, then noted the prior bill had an estimated $13,000,000 impact at the time. He added that the residual code provision limited some filers from taking both exemptions and that roughly "7 to 800 filers every single year" call DFA when they encounter the issue on their returns. Gering described SB 313 as a corrective measure to remove the unintended restriction.

Committee members discussed whether small revenue-impact bills should be heard; the chair and sponsor described SB 313 as a cleanup that does not change policy intent but corrects an unintended consequence. There was no public testimony. A motion to pass SB 313 was made, seconded and approved by voice vote; the committee then adjourned.