Income tax; authorize deduction for certain income earned by recent college graduates.
Impact
The bill further extends the tax deduction opportunity for an additional two years for graduates who fulfill certain conditions. These conditions include purchasing property for either residential or commercial purposes in the state, establishing a registered business that employs at least one other individual, or serving as a licensed teacher in a public or private institution. This initiative is likely to encourage new graduates to continue living and working in Mississippi, thereby supporting local economies and reducing turnover in the job market.
Summary
Senate Bill 2324 seeks to provide significant tax relief to recent graduates of colleges and universities, both within Mississippi and outside. Under this bill, recent graduates, defined as individuals who have earned their degrees within the previous year, will be allowed to deduct the gross income derived from qualifying jobs in Mississippi from their state income tax. This deduction can be claimed for up to three consecutive years, provided the individual remains a resident and maintains employment in a qualifying job during that time period.
Contention
While SB2324 has the potential to attract and retain young professionals in Mississippi, it also raises concerns regarding state revenue. The maximum aggregate amount of deductions authorized is set at $100 million per taxable year, which may strain the state budget if the deduction is utilized extensively. Additionally, there might be debates about how the bill balances the need for economic incentives against the necessity of maintaining adequate funding for public services funded through income tax revenues.