H.B. 232 - Capital Gains Tax Summary

• Repeals preferential tax rate for capital gains, requiring capital gains income to be taxed at the same rates as ordinary income for individuals, estates, and trusts.

• Eliminates the previous 7.25% maximum tax rate on net capital gains that was lower than marginal rates on ordinary income.

• Projects revenue generation of $132,000,000 in the next fiscal year, rising to an estimated $187,000,000 within six years from taxing capital gains at ordinary income rates.

• Applies to taxable years beginning after December 31, 2022, with effective date upon approval.

• Directs revenue to support public education, affordable housing, mental health services, childcare access, tax credits for working families, climate adaptation, and homeless services.