Senate Finance hears SB164 to eliminate several small tax discounts

Sen. Kelly Merrick, sponsor of Senate Bill 164, told the Senate Finance Committee on March 17 that the bill is a targeted effort to reassess a handful of tax credits and discounts recommended for legislative review.

"If a simple tax bill exists, this is it," Merrick said, and described the bill as taking "noncontroversial" recommendations from the nonpartisan indirect expenditure report and asking whether the state should continue foregoing the identified revenue.

Sorsha Hazleton, staff to Senator Merrick, told the committee the bill draws from the 2021 indirect expenditure report and would eliminate several items including the motor fuel timely filing credit, the tobacco products timely filing deduction, the cigarette stamp tax discount, and the tire fee timely filing discount. Hazleton said the selections were chosen based on legislative finance recommendations and likely ease of consensus; she noted the bill does not target senior business-license discounts or exemptions for government entities.

Committee member Senator Stedman asked specifically about the cigarette stamp discount. Hazleton explained the discount began in 2003 to offset the one-time purchase of stamping machinery ("the machine cost $75,000 and the discount was up to $50,000"), that stamping is now mostly performed out of state, and that approximately eight companies benefit "to the tune of roughly $40,000 a year." She said sections of the bill addressing the stamp would recover roughly $308,000 annually.

Senator Kiel reviewed the Department of Revenue fiscal note and said the agency expects no increased operating appropriation and that the tax software can be reprogrammed within existing resources. Kiel recited the fiscal estimate: "They show increased revenues, of $265,000 unrestricted general funds, and $202,700 of designated general funds." That combined figure aligns with the committee's earlier estimate that the bill could produce several hundred thousand dollars in additional annual revenue.

The committee opened the public hearing and heard no testimony in person or online. After questions and fiscal review, the chair set SB164 aside for later consideration; no final committee vote or formal action on the bill occurred during this session.

The bill will return to the committee for further consideration and any required follow-up on fiscal questions and potential amendments.