SB 123

Under the federal Internal Revenue Code, a taxpayer may claim a deduction

equal to 9 percent of the taxpayer's qualified production activities income in the

taxable year or 9 percent of the taxpayer's total taxable income, whichever is less.

For federal tax purposes, qualified production activities income is, generally, the

amount of the taxpayer's domestic production gross receipts that exceed the sum of

the cost of goods sold and other expenses, losses, or deductions. Domestic production

gross receipts are, generally, gross receipts derived from property that was

manufactured, produced, grown, or extracted in the United States.

Under this bill, an individual taxpayer may claim a state income tax credit

equal to the taxpayer's qualified production activities income derived from

manufacturing property and agricultural property, multiplied by 7.5 percent. A

corporation or insurer may claim a state income and franchise tax credit equal to the

lesser of its taxable income apportioned to this state or its qualified production

activities income derived from manufacturing property or agricultural property,

multiplied by 7.5 percent.