HB0603 Summary

• Establishes a sales tax holiday from August 1-7, 2021 that reduces the tax rate on clothing items (under $100) and school supplies from 6.25% to 1.25%.

• Modifies the State Finance Act to direct revenues from the reduced 1.25% tax rate on sales tax holiday items to the State and Local Sales Tax Reform Fund and Local Government Tax Fund (instead of other designated funds).

• Applies the same tax holiday treatment to county and mass transit district funds, directing 20% of 1.25% rate revenues from holiday items to those funds beginning September 1, 2021.

• Makes conforming changes to the Use Tax Act and Retailers' Occupation Tax Act to define eligible clothing and school supply items with specific exclusions (accessories, protective equipment, art supplies, instructional materials, and computers).

• Takes effect immediately upon becoming law.