HB 1377 - Taxation Summary

• Sales tax on services: Imposes a 6% sales tax on specified services effective July 1, 2022, with exemptions for religious, healthcare, educational, legal, tax preparation, and media services.

• Water's edge group taxation: Replaces separate affiliated group filing with combined "water's edge group" reporting for multistate corporations to prevent tax avoidance and ensure more accurate income measurement.

• Tax exemption review committee: Creates Joint Legislative Sales and Use Tax Review Committee to comprehensively review and recommend repeal or modification of tax exemptions and exclusions every 9 years.

• Sales tax holidays and exemptions: Establishes annual 7-day sales tax holiday in August for clothes and school supplies; 2-day May holiday for disaster preparedness supplies; exempts diapers, baby wipes, and college textbooks from sales tax.

• Anti-terrorism and vacant property tax: Imposes $1,500 annual tax on nonhomesteaded vacant residential property in counties with 74,000+ population, with revenues funding affordable housing loans through the State Housing Trust Fund.