§ 47-181 — Tax reform procedure and priority.

District of Columbia § 47-181

• Jurisdiction: District of Columbia
• Title 47: Taxation, Licensing, Permits, Assessments, and Fees. [Enacted title]
• Ch. 1C: Tax Revision Implementation.

Text

(a) If local Fiscal Year 2016 recurring annual revenues included in the quarterly revenue estimate issued in September 2015 exceed the annual revenue estimate incorporated in the approved budget and financial plan for Fiscal Year 2016, the additional revenue shall be used to implement the provisions set forth in the Tax Revision Commission Implementation Amendment Act of 2014, effective February 26, 2015 ( D.C. Law 20-155 ; 61 DCR 9990) (“TRC Act”), according to the priority set forth in subsection (c) of this section, for taxable years beginning or deaths occurring, as applicable, after December 31, 2015; provided, that the Chief Financial Officer shall recalculate the cost of the provisions of the TRC Act with the September 2015 estimate.

(1) After the Fiscal Year 2016 budget and financial plan has been approved by the District, any recurring revenues in a February revenue estimate preceding any subsequent fiscal year, net of the dedication required by § 47-392.02(f) , that exceed the local revenue incorporated in the approved budget and financial plan for that year shall be used to continue implementation of the TRC Act according to the priority set forth in subsection (c) of this section for taxable years beginning or deaths occurring, as applicable, after December 31 of the year of the applicable February estimate.

(2) If local Fiscal Year 2017 recurring annual revenues included in the quarterly revenue estimate issued in September 2016 exceed the annual revenue estimate incorporated in the approved budget and financial plan for Fiscal Year 2017, the additional revenue shall be used to continue implementation of the TRC Act according to the priority set forth in subsection (c) of this section for taxable years beginning or deaths occurring, as applicable, after December 31, 2016; provided, that the Chief Financial Officer shall recalculate the cost of the provisions of the TRC Act with the September 2016 estimate.

(c) The tax reform provisions of this section shall be implemented in the following priority:

(1) Reduce the rate on the new individual income tax middle bracket of $40,000 - $60,000 from 7.0% to 6.75%;

(2) Create new individual income tax brackets of $350,000 to $1 million at 8.75% and in excess of $ 1 million at 8.95%;

(3) Reduce the unincorporated and incorporated business franchise tax from 9.4% to 9.2%;

(4) Reduce the rate on the new individual income tax middle bracket of $40,000 - $60,000 from 6.75% to 6.5%;

(5) Reduce the unincorporated and incorporated business franchise tax from 9.2% to 9.0%:

(6) Raise the estate tax threshold from $1 million to $2 million;

(7) Raise the standard deduction from $5,200 for singles, $6,500 for Head of Household, and $8,350 for married to $5650 for singles, $7,800 for Head of Household, and $10,275 for married;

(8) Increase the personal exemption from $1,675 to $2,200;

(9) Raise the standard deduction from $5,650 for singles, $7,800 for Head of Household, and $10,275 for married to conform to the federal level;

(10) Increase the personal exemption from $2,200 to $2,700;

(11) Reduce the unincorporated and incorporated business franchise tax from 9.0% to 8.75%;

(12) Increase the personal exemption from $2,700 to $3,200;

(13) Raise the estate threshold from $2 million to the amount set forth at § 47-3701(14)(C) ;

(14) Reduce unincorporated and incorporated business franchise tax from 8.75% to 8.5%;

(15) Increase the personal exemption from $3,200 to $3,700;

(16) Reduce unincorporated and incorporated business franchise tax from 8.5% to 8.25%; and

(17) Increase the personal exemption from $3,700 to conform to the federal level, and repeal the low income credit.

(d) Unfunded provisions of the TRC Act shall not apply until their fiscal effect is provided for pursuant to this section.

(e) The cost of the tax policy reforms authorized by subsections (a) and (b) of this section shall be recalculated on an annual basis and reported in each February revenue estimate.

Legislative History

Feb. 26, 2015, D.C. Law 20-155, § 7012(b), 61 DCR 9990; Oct. 22, 2015, D.C. Law 21-36, § 7033, 62 DCR 10905