[PART VII.] REVIEW OF TAX CREDITS, EXCLUSIONS, AND DEDUCTIONS

 

23-91 Review of certain credits, exclusions, and deductions under the income tax and financial institutions tax. (a) The auditor shall conduct a review of the tax credits, exclusions, and deductions listed in sections 23-92 to 23-96.

(b) In the review of a credit, exclusion, or deduction, the auditor shall:

(1) Determine the amount of tax expenditure for the credit, exclusion, or deduction for each of the previous three calendar years;

(2) Estimate the amount of tax expenditure for the credit, exclusion, or deduction for the current calendar year and the next two calendar years;

(3) Determine, to the extent possible, whether the credit, exclusion, or deduction has achieved and continues to achieve the purpose for which it was enacted by the legislature, as reasonably identified by the auditor;

(4) Determine whether the credit, exclusion, or deduction is necessary to promote or preserve tax equity or efficiency;

(5) If the credit, exclusion, or deduction was enacted because of its purported economic or employment benefit to the State:

(A) Determine whether a benefit has resulted, and if so, quantify to the extent possible the estimated benefit directly attributable to the credit, exclusion, or deduction; and

(B) Comment on whether the benefit, if any, outweighs the cost of the credit, exclusion, or deduction; and

(6) Estimate the annual cost of the credit, exclusion, or deduction per low-income resident of the State. For purposes of this paragraph, a "low-income resident of the State" means an individual who is a resident of the State and:

(A) Is the only member of a family of one and has an income of not more than eighty per cent of the area median income for a family of one; or

(B) Is part of a family with an income of not more than eighty per cent of the area median income for a family of the same size.

The cost shall be estimated by dividing the annual tax expenditure for the credit, exclusion, or deduction for each calendar year under review by the number of low-income residents of the State in the calendar year. The estimate determined pursuant to this paragraph is intended to display the effect on low-income residents of the State if they directly receive, either through tax reduction or negative tax, the dollars saved by elimination of the credit, exclusion, or deduction.

(c) Based on the review, the auditor shall recommend whether the credit, exclusion, or deduction should be retained without modification, amended, or repealed.

The auditor may recommend that a credit, exclusion, or deduction be removed from review under sections 23-92 to 23-96. [L 2016, c 245, pt of 2; am L 2017, c 177, 14]

 

 

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