HB 2900 Summary

• Income Tax Rate Reductions: Establishes tiered income tax rate reductions based on state general fund revenue thresholds, reducing top rates from 4.5% to 2.98% (2.75% at highest threshold) starting in tax year 2022, contingent on revenue targets being met.

• Unemployment Benefits Increases: Raises maximum weekly unemployment benefits from $240 to $320 (effective June 30, 2022) and extends potential weeks of benefits to 26 weeks if unemployment rate exceeds 5% or 24 weeks if below 5%.

• Property Tax and Education Funding: Increases homeowner property tax relief from 47.19% to 50% of qualifying tax rates starting January 1, 2022, and increases urban revenue sharing distribution to cities/towns from 15% to 18% of state income tax starting fiscal year 2023-2024.

• Tax Credits and Deductions: Creates new healthy forest production tax credits for processing qualifying forest products; expands school tuition organization eligibility; increases public school fee tax credit limits; and allows military retirement pay full subtraction from taxable income beginning in 2021.

• Coal Sales Exemption and Technical Changes: Exempts sales of coal from transaction privilege tax; adds containment structures to pollution control equipment exemptions; requires fraud prevention measures for unemployment insurance; and establishes notification procedures for tax rate adjustments based on revenue benchmarks.