Two bills (HB 2156 and HB 2157) that provide additional state revenues under the House-proposed budget and extend the state tax structure workgroup, are scheduled for a hearing.

HB 2156 would implement an extraordinary profits tax dedicated to funding for education and a graduated real estate excise tax (REET), a portion of which would be dedicated to education. The House budget assumes that these taxes would provide $910 million to the state.

• The extraordinary profits tax would impose a 9.9 percent capital gains excise tax on sales of long-term assets with more than $100,000 gains for single-filers or $200,000 for joint tax filers.
• The graduated REET would change the current state rate of 1.28 percent by lowering rates for property sales under $500,000 and raise rates for sales over $1.5 million, for the portion of the sale above that amount. The rates would be as follows based on the value of the sale:
  • $500,000 or less: Rate reduced to 0.9 percent
  • $500,000 to $1.5 million: Rate remains at 1.28 percent (current law)
  • $1.5 million to $7 million:
    • The portion of the sale less than $1.5 million - 1.28 percent (current law)
    • The portion of the sale over $1.5 million and less than $7 million - 2 percent
  • More than $7 million:
    • The portion of the sale less than $1.5 million - 1.28 percent (current law)
    • The portion of the sale over $1.5 million and less than $7 million - 2 percent
    • The portion of the sale over $7 million - 3 percent

HB 2157 would repeal or change a number of state tax preferences or preferential tax rates and extend the state tax structure study. The changes include:

• Expanding and reauthorizing the state tax structure workgroup, similar to the changes proposed in HB 2117. The study membership would expand to include non-voting members from cities and counties. The workgroup must provide a preliminary report by December 31, 2020, and a final report by December 31, 2024.
• Replacing the non-resident sales tax exemption with a refund process.
• Repealing tax preferences for sales of bullion and B&O taxes on travel agents.
• Expanding the senior property tax exemption.

Dates to remember

HB 2156 and HB 2157 are scheduled for hearing on Thursday, April 4 at 8 am in the House Finance Committee.