This bill proposes several significant changes to the Business Enterprise Tax (BET) and appropriates funds for nursing facilities. Firstly, it raises the income threshold for businesses required to file a BET return from $250,000 to $400,000, with future adjustments based on the Consumer Price Index starting in 2029. Additionally, the bill introduces a mechanism for reducing the BET rate in the event of a certified business tax surplus, allowing for a reduction of 0.05 percentage points for every $100 million of surplus, while ensuring that the tax rate does not fall below 0.25 percent. The bill also includes provisions for the Department of Health and Human Services, appropriating $2.5 million for nursing facility support, which will be drawn from Medicaid Enhancement Tax revenue or General Funds if necessary.

The bill's fiscal impact is expected to decrease revenue for the General Fund and Education Trust Fund by approximately $2.5 million due to the increased filing threshold, affecting around 3,500 tax filers. However, this decrease may be partially offset by increased Business Profits Tax revenue, as the BET credits will not be available to all taxpayers. The appropriation for nursing facilities is intended to stabilize Medicaid per diem rates, with funds expected to be utilized starting January 1, 2027. The bill's effective date for the appropriation is set for June 30, 2026, while the remaining provisions will take effect on January 1, 2027.

Statutes affected:
Introduced: 77-E:2
As Amended by the House: 77-E:2
As Amended by the Senate: 77-E:5
Version adopted by both bodies: 77-E:5