ORIGINAL
A BILL IN THE COUNCIL OF DISTRICT OF COLUMBIA
To amend, on a temporary basis, Title 47 of the District of
Columbia Official Code to repeal section 47-812(b-5)(2) to repeal the
requirement of the Chief Financial Officer’s certification regarding the
property tax year beginning October 1, 2001 and ending September 30, 2002;
to repeal section 47-813(c-5) to repeal the Chief Financial Officer’s
certification regarding the establishment of property tax classes
beginning October 1, 2001; and to amend section 471808.03(a) to restore a
surtax on the unincorporated business franchise which was intended to be
imposed during tax periods beginning before January 1, 2003.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this act
be cited as the "Tax Parity Rates and Unincorporated Business
Franchise Tax Rate Clarification Temporary Act of 2002".
TITLE I. TAX PARITY RATES CLARIFICATION.
Sec. 101. This title may be cited as the "Tax Parity Rates
Clarification Temporary Act of 2002".
Sec. 102. Chapter 8 of Title 47 of the District of Columbia Official Code
is amended as follows:
(a) Chapter 8 is amended as follows:
(1)(a) Section 47-812(b-5)(2) is
repealed.
(2)(b) Section 47-813(c-5) is repealed.
(b) Section 47-1806.03(a) is amended as follows:
(1) Paragraph (4)(B) is repealed.
(2) Paragraph (5) is repealed.
(3) Paragraph (6)(A) is amended to read as follows:
"(6)(A) In the case of a taxable year beginning after
December 31, 2002, there is imposed on the taxable income of every
resident a tax determined in accordance with the following table:
$30,000.". |
(4) Paragraph (7)(A) is amended to read as follows:
"(7)(A) In the case of a taxable year beginning after
December 31, 2003, there is imposed on the taxable income of every
resident a tax determined in accordance with the following table:
$40,000.". |
(5) A new paragraph (8) is added to read as follows:
"(8)(A) In the case of a taxable year beginning after
December 31, 2004, there is imposed on the taxable income of every
resident a tax determined in accordance with the following table:
$40,000.". |
(B) Subparagraph (A) of this paragraph shall not apply if
the certification by the Chief Financial Officer required by
§47-387.1 demonstrates that the accumulated general fund balance
for the immediately preceding fiscal year is less than 5% of the
general fund operating budget for the current fiscal year, the
nominal GDP growth is less than or equal to 3.5%, or the real GDP
growth is less than or equal to 1.7%.".
TITLE II. TAX PARITY UNINCORPORATED BUSINESS FRANCHISE TAX RATE
CLARIFICATION.
Sec. 201. This title may be cited as the "Tax Parity
Unincorporated Business Franchise Tax Rate Clarification Temporary Act of
2002".
Sec. 202. Section 47-1808.02(a) of the District of Columbia Official
Code is amended as follows:
(a) A new paragraph (3A) is added to read as follows:
"(3A) A surtax at the rate of 2.5% on the tax determined under
paragraph (2) of this subsection, as applicable.
(b) Paragraph (4) is amended to read as follows:
"(4) A surtax at the rate of 2.5%, separate from and in
addition to, the surtax imposed by paragraph (3A) of this subsection, on
the tax determined under paragraph (2) of this subsection, as
applicable, for any tax period beginning after September 30, 1994.".
Sec. 203. Applicability.
(a) Section 202(a) shall apply for any tax period beginning after
September 30, 1992.
(b) Section 202(b) shall apply for any tax period beginning after
September 30, 1994.
Sec. 204. Repealer.
Section 47-1808.03(a)(3A) and (4) are repealed effective for all tax
periods beginning after December 31, 2002.
TITLE III. FISCAL IMPACT STATEMENT; EFFECTIVE DATE.
Sec. 301. Fiscal impact statement.
The Council adopts the attached fiscal impact statement as the fiscal
impact statement required by section 602(c)(3) of the District of Columbia
Home Rule Act, approved December 24, 1973 (87 Stat. 813; D.C. Official
Code §1-206.02(c)(3)).
Sec. 302. Effective date.
(a) This act shall take effect following approval by the Mayor (or in the
event of veto by the Mayor, action by the Council to override the veto),
and shall remain in effect for no longer than 90 days, as provided for Temporary
acts of the Council of the District of Columbia in section
412(a) of the District of Columbia Home Rule Act, approved December 24,
1973 (87 Stat. 788; D.C. Official Code § 1-204.12(a)).
(b) This act shall expire after 225 days of its having taken effect.
Government of the District of Columbia
Office of the Chief Financial Officer
Natwar M. Gandhi
Chief Financial Offices
MEMORANDUM
TO: The Honorable Linda W. Cropp
Chairman, Council of the District of Columbia
FROM: Natwar M. Gandhi
Chief Financial Officer
DATE: March 4, 2002
SUBJECT: Fiscal Impact Statement: "Tax Parity Rates Clarification
Emergency Act of 2002"
REFERENCE: Bill Number Not Available – Draft Legislation as Introduced
Conclusion
Funds are sufficient in the FY 2002 budget and the proposed FY 2003
through FY 2006 budget and financial plan to implement the provisions of
the proposed legislation. The proposed legislation will result in
additional tax collections of $34 million in FY 2002 and $141 million in
FY 2002 through FY 2005.
Background
Title I of the proposed legislation reduces the highest income tax rate
of 9.3 percent to 9.0 percent for tax year 2003. Then additional
reductions to this rate will continue from 9.0 percent to 8.7 percent in
tax year 2004 and then 8.5 percent in tax year 2005. Title II of the
proposed legislation requires the unincorporated business franchise tax
rate be fixed at 2.5 percent. This rate is applicable for any tax year
beginning after September 30, 1994.
Financial Plan Impact
Funds are sufficient in the FY 2002 budget and the proposed FY 2003
through FY 2006 budget and financial plan. The proposed legislation will
result in additional tax collections as presented in the table below.
Impact to Local General Fund Revenue
($ in millions)
| FY 2002 | FY 2003 | FY 2004 | FY 2005 | 4-Year Total |
| $34 | $43 | $64 | $0 | $141 |