SB 290

This bill creates an individual income tax subtract modification, or deduction,

for up to $100,000 or $200,000 of income earned in this state by a psychiatrist, in the

taxable year to which the claim relates, from the practice of psychiatry. The

maximum $200,000 deduction may be claimed by a psychiatrist who practices in a

medically underserved area, as defined under federal law, and the maximum

$100,000 deduction may be claimed by a psychiatrist who does not practice in such

an area. The deduction may not be claimed for more than five years, and must be

claimed during the five-year period that begins once the claimant first claims the

credit. The deduction must be claimed initially within the first two years that a

psychiatrist begins to practice in this state, or within the first two years that a

psychiatrist returns to this state after practicing in another state for at least one

year. If an individual begins to claim the deduction and is then ineligible to claim

the deduction in any year that he or she is a full-year resident of this state, the

individual may again claim the deduction in a future year if eligible to do so. If an

individual begins to claim the deduction but is unable to claim it for five consecutive

years because he or she leaves the state, the individual must add to his or her tax that

is due for the year in which he or she leaves the state the total gross tax that would

have been due if the subtraction was not claimed for any year minus the amount of

gross tax actually due for those years. In addition, an individual who is eligible for

and claims the deduction may not claim the homestead tax credit.

Because this bill relates to an exemption from state or local taxes, it may be

referred to the Joint Survey Committee on Tax Exemptions for a report to be printed

as an appendix to the bill.