Wednesday, March 14, 2012

Reynolds Amendment Preserves Current Tax Exemptions

OKLAHOMA CITY (March 14, 2012) – An amendment filed by state Rep. Mike Reynolds would preserve existing tax exemptions for retirees and other citizens.
“It makes no sense to lower tax rates while eliminating exemptions,” said Reynolds, R-Oklahoma City. “We should cut taxes – period.”
Reynolds filed an amendment to House Bill 3061, which is the vehicle for Gov. Mary Fallin’s tax reform plan. That measure would reduce the number of tax brackets from seven to three, cutting all rates. Under the bill, the top rate would fall from 5.25 percent to 3.5 percent and families with income of $30,000 or less would pay no income tax at all.
As originally filed, the bill would have offset much of the revenue lost to lower rates through eliminating existing exemptions.
Reynolds’ amendment restores most of those exemptions while leaving the rate cuts in place. The amendment was adopted during debate on the bill today.
“Due to the elimination of so many tax breaks, many citizens realized HB3061 would actually increase their tax burden,” said Reynolds, R-Oklahoma City. “With my amendment, it will actually be he tax cut it was advertised to be.”
Reynolds’ amendment preserves the tax breaks for the following situations:
•Exclusion of prisoner-of-war earnings from taxation,
•Exclusion of payment made by the U.S. department of Defense as a result of the death of a member of the Armed Forces who has been killed in action in a designated war zone,
•Income tax deductions for political contributions,
•Adjustments for individuals engaged in the business of farming,
•Adjustments for bonus depreciation,
•The volunteer firefighter tax credit,
•Net operating loss deduction for individuals,
•Certain interest income on obligations,
•Agricultural commodity processing facility investment,
•OSHA Safety Pays exemption,
•Deferred income inclusion (ARRA),
•Personal exemptions,
•Itemized deductions,
•Vehicle modification deduction,
•Active military deduction,
•POW/MIA deduction,
•Dividends and interest from Oklahoma institutions,
•Retirement benefit deduction,
•Social Security benefit deduction,
•Lump-sum distribution treatment,
•Contributions to medical savings accounts exemption,
•Swine/Poultry construction depreciation treatment,
•Adoption expense deduction,
•Agriculture obligation discharge treatment,
•Police Corps scholarship exemption,
•College Savings Plan contribution deduction,
•Military retirement exemption,
•Federal civil service annuity payment deduction,
•Organ donation deduction,
•Emergency medical professional death benefit exemption,
•Unemployment compensation inclusion,
•Livestock award exemption,
•Capital gains treatment
“I would like to thank the citizens for contacting me and other legislators on this important issue,” Reynolds said. “I believe outpouring of concern showed the necessity to restore these exemptions, and I appreciate that my amendment was adopted without dissent.”

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