A bill to exempt new businesses from having to pay any state income taxes in their first year of operation has passed the state Senate. That tax break would taper off to 50% in the second year and 25% in the third.
Republican Steve Kaiser is the bill’s sponsor. He says the measure provides fiscal breathing room for young businesses.
"If we can help them insulate some of their income, help them insulate some of their revenue through fees reductions and tax reductions, that'll help those young businesses survive and thrive and start hiring even more folks," Kaiser said.
But Democrats were opposed, even after language was added to tighten the bill so companies don't simply dissolve and re-form, which would take advantage of the tax break.
Legislative budget staffers predict the bill would reduce state revenues by almost $39 million by 2027.
The measure now goes to the House.
