During the busy last day of session prior to the Summer
recess, the House of Representatives quietly moved a bill that has been sat
idle for more than a year.
Senate Bill 409,
sponsored by Senator Goeff Hansen (R-Hart), passed the Senate in 2011. When it
moved over to the House, it proposed to entirely exempt all retirement income from
the state’s individual income tax for those who do not participate in Social
Security. The H-7 substitute passed by the House provides these individuals
with a higher exemption than the general public, but not a total exemption.
The measure passed 108-1 with only Representative Doug Geiss
(D-Taylor) voting no.
The law currently provides the income tax
exemption of $20,000 for an individual or $40,000 for a couple to those born
between 1946 and 1952. The legislation adds government employees not covered by
Social Security to the section and increases the exemption values to $35,000
and $55,000, respectively.
Although it is unclear when the Senate may act
on the House-passed version of the reform, all signs indicate the upper Chamber
is pleased with the changes.