Legislators take another crack at capital gains tax
Called a “real solid option” by Senate Democratic Leader Sharon Nelson (D-34) a capital-gains tax proposal is contained in two bills and was the subject of a hearing yesterday. AGC is opposing the measures and AGC members who intend to sell their business someday should take note as that is the scenario most likely to be affected by the proposed tax.
Bill SB 6102 sponsored by Sen. Kevin Ranker (D-40) is a stand-alone capital gains tax bill. Another bill SB 6104 sponsored by Sen. Christine Rolfes (D-23) includes the tax as part of a broad funding bill. The proposals would raise an estimated $1.7 billion through 2019. The particulars are the same in both:
• 7% of the capital gains amount reported on the federal income tax return
• Exemptions include the sale or exchange of residential real property; retirement accounts; cattle horses or breeding livestock held for more than 12 months; agriculture or timber land; or timber.
• Thresholds of $500000 for joint filers; $25000 for all others.
Sen. Ranker in attempt to make the new tax more palatable politically also introduced a proposed constitutional amendment which would have to pass the legislatures and ratified by the voters. The measure SJR 8206 would only place the threshold amounts ($500K $250K) under the protections of the state constitution. The rate and the exemptions are not part of the proposed amendment.
The capital gains proposals will have a hard time passing the full Legislature but rumor has it that proponents will seek to enact it via a ballot initiative in 2016.
For more information contact AGC’s Chief Lobbyist Jerry VanderWood 360.352.5000.