Substitute House Bill No. 5443 proposes significant amendments to the sales and use tax laws, particularly concerning motor vehicles, peer-to-peer car sharing, and personal property used in burials and cremations. Key changes include the introduction of a new sales tax rate of nine and thirty-five-hundredths percent for the rental or leasing of passenger motor vehicles and peer-to-peer car sharing for periods of thirty consecutive calendar days or less. The bill also raises the sales tax exemption threshold for motor vehicles from fifty thousand dollars to seventy-five thousand dollars, applying a tax rate of seven and three-fourths percent on vehicles exceeding this new threshold. Additionally, the exemption for personal property used in burials and cremations is increased from two thousand five hundred dollars to ten thousand dollars, and the sales tax-free week exemption is expanded from one hundred dollars to three hundred dollars, including backpacks as exempt items.

The bill further outlines the allocation of tax revenues, mandating that a percentage of the tax revenue from specific taxes be deposited into various funds, including the Tourism Fund and the Special Transportation Fund. Notably, it requires that ten percent of the tax revenue from a specified tax be allocated to the Tourism Fund starting from calendar quarters ending on or after September 30, 2018. The bill also repeals and replaces certain existing provisions, including the previous exemption limit for funeral establishment sales and modifies the tax treatment of jewelry and clothing. The effective date for many of these changes is set for October 1, 2026, while some provisions take effect immediately upon passage.

Statutes affected:
Raised Bill: 12-407e
FIN Joint Favorable Substitute: 12-407e
File No. 684: 12-407e