The proposed bill amends the Income Tax Act of 1967 by adding a new section that allows taxpayers to claim a credit against their income tax for sales or use tax paid on textbooks purchased during the tax year. This credit is available for tax years beginning on or after January 1, 2026, and can be claimed by eligible students or on behalf of dependents who are also eligible students. The bill outlines that taxpayers may need to provide receipts and proof of eligibility to support their claims, and if the credit exceeds the taxpayer's tax liability, the excess amount will be refunded.

Additionally, the bill defines key terms related to the credit, including "eligible institution," which refers to vocational schools or higher education institutions participating in federal student aid programs, and "eligible student," which includes individuals awarded federal Pell grants and maintaining satisfactory academic progress. The definitions also clarify what constitutes a "textbook" and specify the relevant sales and use tax laws. Overall, this legislation aims to provide financial relief to students and their families by offsetting the costs of educational materials.

Statutes affected:
House Introduced Bill: 206.1, 206.847