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House and Senate make changes to tax reform plans but it’s far from a done deal

Published: Mar. 15, 2022 at 7:58 PM CDT
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JACKSON, Miss. (WLBT) -There is consensus among legislative leaders that they want to provide some form of tax relief; however, that’s about where the agreement ends. The House and Senate are still at odds on details of a tax reform plan.

The House is backing off some of its initial plans but keeping its main goal in focus.

“We believe this new proposal eliminates the income tax and addresses all the concerns that have been expressed,” said Speaker Philip Gunn during a press conference Tuesday.

A major concession is that the new proposals no longer includes a sales tax increase.

“There are no tax increases in this new bill,” noted Gunn. “That, therefore, removes that objection.”

Because of that, the new plan takes longer to phase in a grocery tax reduction from 7% to 4%. And they took the elimination of the car tag fee off the table.

“We’re trying to get a deal done at this point in time, and that’s why it was removed,” described Ways and Means Chairman Rep. Trey Lamar.

The Speaker has made it no secret that this is his priority this session. But some members say that’s coming with a price.

“It has incredibly slowed things down,” explained Sen. Derrick Simmons, Senate Minority Leader. “We have a calendar on the Senate side of what nearly 100 bills and a lot of that is because of the maneuvering in the legislative process regarding the Gunn’s tax cut bill.”

The Senate is moving its own version of tax reform forward. It reduces grocery tax immediately from 7% to 5% and suspends gas tax for six months. But noticeably absent is that key provision from the House. It does not fully eliminate the income tax. It instead eliminates the 4 percent bracket over 5-8 years.

“We’ve produced a plan that does not jump out and over-extend us,” said Senate Finance Chairman Sen. Josh Harkins. “It’s about a half a percent cut year over year. We feel like it’s something that can be absorbed and given back to taxpayers.”

The bills will now go to a conference committee, and we’ll see whether they can find a compromise. While the Speaker detailed the House’s recent concessions, full elimination of income taxes doesn’t seem to be one he’s willing to back down on.

“We believe that an agreement can be reached with the Senate on this issue,” said Gunn. “If we will simply devote ourselves to discussing it.”

The Speaker is also calling on the Governor to endorse the House plan since it is the only plan with full elimination of the income tax. And that’s something the Governor has said he wants to see happen.

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