The 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 the Department of Treasury may require taxpayers to provide receipts and proof of eligibility, and if the credit exceeds the taxpayer's tax liability, the excess amount will be refunded.

Key definitions are provided in the new section, including "eligible institution," which refers to vocational schools or higher education institutions participating in federal student aid programs, and "eligible student," defined as individuals awarded a federal Pell grant and enrolled in an eligible institution while maintaining satisfactory academic progress. The bill also clarifies what constitutes a "textbook" and specifies the relevant sales and use tax laws.

Statutes affected:
House Introduced Bill: 206.1, 206.847