SB 1376 Summary

• Repeals multiple state and local tax systems effective January 1, 2013, including sales taxes, use taxes, and various excise taxes imposed under the current tax code structure.

• Establishes a Business Net Receipts Tax Law (Part 12) imposing a flat 5.8% tax on business entities' net receipts (gross receipts minus purchases from other businesses), replacing the corporate tax structure.

• Reforms personal income tax by implementing a single flat 5.8% tax rate for all taxpayers, eliminating the alternative minimum tax, and restricting itemized deductions to specific categories (residence interest, charitable contributions, education loan interest, and certain other limited items).

• Repeals the employment training tax (0.1% employer payroll tax) that funds the Employment Training Fund under the Unemployment Insurance Code.

• Includes transitional provisions allowing carryforward of net operating losses, excess capital losses, and certain tax credits from prior law into the new tax system, subject to annual usage limitations of 5%.