Committee presses for privacy guardrails as it advances tax-disclosure bill

On Feb. 13, the committee considered HB2429, which would increase transparency for tax credits and exemptions by expanding required disclosures. Tom Yamachika of the Tax Foundation told members the bill, as drafted, could force many taxpayers to file returns with both the Department of Taxation and DBEDT, and that the consequences of failing to file with one agency are unclear.

DOTAX representatives questioned whether the bill's public-disclosure provisions could conflict with federal tax law if federal tax information were effectively released. DOTAX and other witnesses advised that summary, anonymized reporting would be acceptable but warned that even anonymized totals can identify taxpayers when only a few claim a credit.

Committee members pressed for a balance between transparency and privacy. A recurring suggestion from witnesses was to require summary reporting and to add statutory guardrails that would prevent the release of identifiable federal tax information, or to specify thresholds below which data must remain aggregated.

The committee adopted the chair's recommendation to pass HB2429 with amendments and directed DOTAX and DBEDT to propose specific anonymization language and definitions of reporting thresholds before finalization.