AB 262

This bill modifies the individual income tax rates and brackets beginning with

the 2024 tax year and ending with the 2028 tax year. The bill decreases individual

income tax rates each year for each tax bracket. Beginning with tax year 2027, the

tax rate for individuals whose income is $7,500 or less, before being adjusted for

inflation, is zero. Beginning with tax year 2028, the tax rate for individuals whose

income exceeds $7,500, before being adjusted for inflation, is 4.5 percent.

Under current law, there are four income tax brackets for single individuals,

certain fiduciaries, heads of households, and married persons, and the brackets are

indexed for inflation. The rate of taxation under current law for the lowest bracket

for single individuals, certain fiduciaries, heads of households, and married persons

is 3.54 percent of taxable income. The rate for the second bracket is 4.65 percent.

The rate for the third bracket is 5.3 percent. And the rate for the highest bracket is

7.65 percent. Before bracket indexing, the four brackets for individuals, certain

fiduciaries, and heads of households, to which the above rates apply, are as follows:

1) taxable income from $0 to $7,500; 2) taxable income exceeding $7,500 but not

exceeding $15,000; 3) taxable income exceeding $15,000 but not exceeding $225,000;

and 4) taxable income exceeding $225,000.

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.