HB799 Summary

• Suspends general excise and use tax exemptions for 22 categories of persons and transactions from January 1, 2012 through June 30, 2015, including contractors, federal cost-plus contractors, nonprofit organizations (for certain conventions and trade shows), agricultural producers, and maritime and aviation service providers.

• Imposes graduated tax rates on previously exempt gross income and proceeds: 2% for 2012, 3% for 2013, and 4% for 2014-2015, with taxes collected by the Department of Taxation.

• Exempts binding written contracts entered into before July 1, 2011 that do not allow for passing through increased tax rates, and exempts any income or transactions that cannot legally be taxed under the U.S. Constitution or federal law.

• Requires information reporting on all exclusions and exemptions from the general excise and use tax chapters, with the director of taxation able to establish rules and procedures for collection and enforcement.

• Takes effect July 1, 2011 and automatically repeals June 30, 2015, with no county surcharges applied to the previously exempt amounts that become subject to taxation.