Tax reform could a major topic of discussion for the legislature when they return next month.
Revenue and Fiscal Affairs Office Executive Director Frank Rainwater told the state Senate Finance Taxation System Review and Reform Subcommittee this week that the state’s two main streams of revenue have to be taken into consideration when considering any tax policy reform. “The two largest sources, income and sales tax. It’s largely dependent on how much money we have to spend.”
“We have had a change in our general fund make up,” Rainwater said. “The two largest sources make up about 86 percent of the general fund.”
Rainwater told senators that corporate taxes are the third component of the state’s revenue source. “So, when you’re talking about tax reform or tax base you’re really talking about these three categories.”
Rainwater said that when all three components are added together they make up the bulk of the state’s general fund. “When you add in corporate income tax, the next largest tax, you’re over 90 percent.”