AB 32

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 or by

a psychiatric or mental health nurse practitioner, in the taxable year to which the

claim relates, from the practice of psychiatry or from providing psychiatric or mental

health services. The maximum $200,000 deduction may be claimed by a psychiatrist

or psychiatric or mental health nurse practitioner who practices or performs services

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

$100,000 deduction may be claimed by a psychiatrist or psychiatric or mental health

nurse practitioner who does not practice or perform services 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 or

psychiatric or mental health nurse practitioner begins to practice in this state, or

within the first two years that a psychiatrist or psychiatric or mental health nurse

practitioner returns to this state after practicing in another state. 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.