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Minutes for HB2186 - Committee on Taxation

Short Title

Allowing single sales factor apportionment of business income for certain taxpayers.

Minutes Content for Mon, Feb 21, 2022

Mr. Siebers provided an overview on HB2186 stating the bill would allow certain taxpayers to elect to apportion income based on the single sales factor other than the three factor apportionment.  The businesses are used in manufacturing production of electricity or storage of electricity and certain agricultural activities. He noted this would be an election not a mandatory requirement and would be effective for ten tax years.  The election would be irrevocable unless given permission to terminate the election by the Secretary of Revenue. Mr. Siebers stood for questions from Committee members.

Representative Mason moved, seconded by Representative Eplee, the Committee recommend HB2186 favorable for passage.

Representative Highland moved, seconded by Representative Mason to amend HB2186 by adding several industry groups based on the North American Industry Classification System codes (NAICS).  Motion passed. (Attachment 4)

Representative Bergkamp moved, seconded by Representative Awerkamp, to amend HB2186. (Attachment 5)

Committee discussion ensued.

Motion failed.

Representative Gartner moved, seconded by Representative Baker, to amend HB2186 requiring the Secretary of Revenue to provide a report to the Senate and House Taxation committees by March 1, 2026, to provide number of taxpayers that elected the single factor for apportionment and the results of the election.  Motion passed. (Attachment 6)

Representative Mason renewed his motion to recommend HB2186 favorable for passage as amended.  Motion passed.

Meeting adjourned at 4:15 p.m.