This bill seeks to reduce property taxes for owner-occupied properties while increasing certain gross receipts and use tax rates. The increased tax revenues will be allocated to replace property tax revenues lost from a zero mill levy on owner-occupied single-family dwellings and to support ongoing expenditures for state and school employees and Medicaid providers. The legislation clarifies that these changes will not affect the maximum mill levies for other property classifications or the total funding available to school districts. Key amendments include changing the maximum levy for school district general funds from a tax to a mill levy, with specific rates established for agricultural and owner-occupied properties.

Additionally, the bill introduces a tiered tax rate structure for gross receipts from various services and products, gradually increasing from 4.2% to 5% starting July 1, 2027. It modifies the tax rates on ancillary services, farm machinery, and amusement devices, transitioning from a fixed percentage to a tiered structure that will reach five percent by 2027. The bill also establishes a similar tiered tax rate for rental vehicles and emphasizes the need for proportional adjustments in local effort and state aid to education. Notably, it repeals a previous provision that would have reverted the amendments after a set period, thereby solidifying the changes made in this legislation and aiming for a more equitable tax structure aligned with local educational needs.

Statutes affected:
Introduced, 02/04/2026: 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, 13-13-71, 13-13-72, 13-13-72.1, 13-37-16, 13-37-16.2, 13-37-16.3, 13-37-35.1, 32-5B-20