HB 2877 - Summary

• Increases the general excise tax rate from 4% to 5% on sales, services, contracting, and other business activities for the period October 1, 2010 through September 30, 2012.

• Increases the use tax rate from 4% to 5% on tangible personal property and imported services during the same temporary period.

• Increases public service company taxes from 4% to 5% for utilities, airlines, and motor carriers, with revenues exceeding the 4% rate directed to counties.

• Establishes a refundable state earned income tax credit equal to 20% of the federal earned income tax credit for eligible resident individuals and part-year residents.

• All tax increases automatically expire on September 30, 2012, returning rates to 4% unless the legislature reenacts the higher rates; the earned income tax credit applies to taxable years beginning after December 31, 2010.