What would tax reform mean for you?

What would income tax elimination mean for you? Use our tool below to see how you and your family would fare under the House plan to eliminate income tax. Also see how much worse off you might be under the Senate plan.

1. Enter your county (double-click in the cell, for this step and the following steps)
2. Enter your income
3. Enter your car value
4. Enter your marital status

*Note: Both the Senate and House plans have changed since their original bills. This model reflects the tax plans as of 3/17/2022. 

*For best results, please view on a desktop computer

The components of the House bill:

1. Effective Jan. 1, 2023, increase the combined total of the personal exemption and the standard deduction from the current $8,300 to $40,000 for individuals, and for married couples from $16,600 to $80,000. After 2023, these amounts would potentially increase annually, based on the growth in government revenue, until all income is exempt from state income tax.
2. Increase the general sales tax and use tax rates from 7.0% to 8.5% effective July 1 of this year.
3. Reduce the sales tax rate on groceries (non-prepared food) from 7.0% to 5.5% effective July 1 of this year; then reduce it by a quarter-of-one-percent each July 1 for the next six years, to the final rate of 4%. Because cities receive from the state a portion of the sales tax derived from sales in their cities, the state would reimburse cities for the reduction in revenue from the decrease in the grocery tax.
4. Cut the “cost of a car tag” (which is really the cost of ad valorem tax on automobiles) by 50% to the taxpayer. However, because that tax is a local tax, the state would reimburse local governments to make up their lost revenue from this mandated cut in ad valorem taxes. This would be funded by a third (a half-percent) of the 1.5% increase in the general sales tax.

Link to the House bill.

The components of the Senate bill:

1. Eliminate, over four years, the 4% income tax bracket, which is now assessed on taxable income of $5,001-$10,000. This would, in the fourth year, be a $200 tax cut (4% x $5,000).
2. Cut sales tax on groceries from current 7% to 5% immediately (no phase in)
3. Eliminate the state fee attached to car tags ($5 or so per tag)
4. One-time rebate of 5% of last year’s tax liability, with a minimum of $100 and maximum of $1,000, which means most people will receive $100-$200.

Link to Senate bill.