This bill proposes the elimination of property taxes on owner-occupied single-family dwellings, replacing the lost revenue by increasing certain gross receipts and use tax rates. Specifically, the maximum mill levy for these properties will be set to zero, while the gross receipts tax rate will rise from 4.2% to 5% across various sectors, including retail sales, telecommunications, and utilities. The legislation ensures that the increased tax rates will maintain funding for school districts, particularly for general and special education, without affecting the mill levies for other property classifications.

Additionally, the bill establishes a special education fund for school districts, funded through a property valuation-based levy, specifically aimed at addressing the special education needs of children in the district. It outlines that the levy will be calculated based on a median assessment level of eighty-five percent of market value and allows for the use of these funds for assistive technology as specified in individual education plans. The bill also mandates annual increases in state aid appropriations based on local need starting in 2026 and adjusts the tax rate on rental vehicles to five percent. Most provisions of the bill will take effect on January 1, 2026, while repealing a previous law that would have reverted these amendments by June 30, 2027.

Statutes affected:
Introduced, 01/08/2025: 10-12-42, 10-45-2, 10-45-5, 10-45-5.3, 10-45-6, 10-45-6.1, 10-45-6.2, 10-45-8, 10-45-71, 10-46-2.1, 10-46-2.2, 10-46-58, 10-46-69, 10-46-69.1, 10-46-69.2, 10-46E-1, 10-58-1, 13-37-16, 13-37-35.1, 13-13-71, 13-13-72, 13-13-72.1, 32-5B-20