Section 23-71 - Review of certain exemptions, exclusions, and credits under the general excise and use taxes, public service company tax, and insurance premium tax(a) The auditor shall conduct a review of the tax exemptions, exclusions, and credits listed in sections 23-72 to 23-81.(b) In the review of an exemption, exclusion, or credit, the auditor shall: (1) Determine the amount of tax expenditure for the exemption, exclusion, or credit for each of the previous three calendar years;(2) Estimate the amount of tax expenditure for the exemption, exclusion, or credit for the current calendar year and the next two calendar years;(3) Determine, to the extent possible, whether the exemption, exclusion, or credit 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 exemption, exclusion, or credit is necessary to promote or preserve tax equity or efficiency;(5) If the exemption, exclusion, or credit 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 exemption, exclusion, or credit; and(B) Comment on whether the benefit, if any, outweighs the cost of the exemption, exclusion, or credit; and(6) Estimate the annual cost of the exemption, exclusion, or credit 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 exemption, exclusion, or credit 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 exemption, exclusion, or credit.
(c) Based on the review, the auditor shall recommend whether the exemption, exclusion, or credit should be retained without modification, amended, or repealed. The auditor may recommend that an exemption, exclusion, or credit be removed from review under sections 23-72 through 23-81.
Amended by L 2017, c 177,§ 3, eff. 7/11/2017.Added by L 2016, c 261,§ 2, eff. 7/1/2017.