This bill introduces significant changes to the state's taxation structure, reinstating the Interest and Dividends Tax at a rate of 5% for taxable periods ending on or after December 31, 2025. It also increases the Business Profits Tax from 7.5% to 8.5% and the Business Enterprise Tax from 0.55% to 0.75%, both effective for taxable periods ending on or after December 31, 2025. Additionally, the Meals and Rooms Tax on meals will rise from 8.5% to 9.0%, effective July 1, 2025. The bill specifies that all additional revenue generated from these tax increases will be allocated to the education trust fund, with a clear deletion of previous tax rates and the insertion of new rates to facilitate this revenue distribution.

Moreover, the bill proposes the establishment of a New Tax distinct from the repealed Income and Dividends tax, with a recommendation for a specific definition of "income" to avoid taxpayer confusion. It outlines changes to the Business Enterprise Tax and Business Profits Tax, estimating a decrease in revenue to the General Fund while increasing allocations to the Education Trust Fund. The bill also includes administrative provisions for the Department of Revenue Administration, which will incur a one-time cost of approximately $20,000 to inform taxpayers about the reinstated tax. Overall, the legislation aims to enhance educational funding through these tax adjustments while addressing complexities in revenue allocation and taxpayer compliance.

Statutes affected:
Introduced: 77-A:2, 77-A:20-a, 77-E:14, 78-A:6