House Bill No. by Representative Jordan proposes to repeal the scheduled reduction of the state sales and use tax rate from 1% to 0.75% beginning January 1, 2030, thereby making the 1% rate permanent. The bill also establishes the Teacher Compensation Fund within the state treasury, which will receive a portion of the sales tax revenues. Specifically, it mandates that 0.25% of the 1% sales tax collected be allocated to this fund, which is intended to support teacher pay raises. The funds will be appropriated to the Minimum Foundation Program to provide a $2,000 pay raise for teachers and a $1,000 pay raise for support staff.

In addition to the establishment of the Teacher Compensation Fund, the bill amends several sections of the existing law regarding the imposition of sales and use taxes, ensuring that the tax is collected on both tangible personal property and digital products. The bill also repeals certain provisions related to the previous tax reduction and clarifies the investment and management of the funds within the Teacher Compensation Fund. The effective date of the bill is contingent upon the governor's signature or the expiration of the time for bills to become law without signature.

Statutes affected:
HB656 Original: 47:1(G)