SB 695

Current law allows a county to enact an ordinance to impose sales and use taxes at the rate of 0.5 percent of the sales price or purchase price on tangible personal property and taxable services. The county must use the revenue from the taxes for property tax relief. Under the bill, a county may imposes that county sales and use tax at the rate of 0.1, 0.2, 0.3, 0.4, or 0.5 percent. The bill also allows a county to impose, by ordinance, an additional sales and use tax at the rate of 0.1, 0.2, 0.3, 0.4, or 0.5 percent of the sales price or purchase price on tangible personal property and taxable services. The revenue from those taxes may be used for any purpose designated by the county board or specified in the ordinance.

The bill also allows a municipality to enact an ordinance to impose sales and use taxes at the rate of 0.1, 0.2, 0.3, 0.4, or 0.5 percent of the sales price or purchase price on tangible personal property and taxable services. The revenue from those taxes may be used for any purpose designated by the governing body of the municipality or specified in the ordinance.

The bill also excludes revenues generated from a municipal sales and use tax from being considered in determining eligibility for an expenditure restraint incentive program payment. Under current law, a municipality is eligible to receive an expenditure restraint incentive program payment if its property tax levy is greater than 5 mills and if the annual increase in its municipal budget, subject to certain exceptions, is less than the sum of factors based on inflation and the increased value of property in the municipality as a result of new construction.