HB 1406 Summary

• Defines "prepared food" for sales and use tax purposes as food sold in a heated state, two or more ingredients mixed by the seller, or food sold with eating utensils provided by the seller, with specific exclusions for uncooked foods and bakery items.

• Establishes taxability matrix requirements for streamlined sales tax member states to complete sections documenting uniform application of tax definitions and public tax practices, with a 30-day liability relief period for sellers relying on erroneous state-provided data.

• Creates "best practices" standards for sales and use tax administration adopted by the governing board that are voluntary for member states, with states required to complete a best practice matrix within 30 days of board approval.

• Authorizes the governor to enter state-tribal agreements with the Standing Rock Sioux Tribe for administration of sales, use, and gross receipts taxes within the reservation, allocating 80% of revenue to the tribe (capped at $2 million per biennium) and 20% to the state, with a 3% administrative fee to the tax commissioner.

• Amends streamlined sales tax board membership to include four legislative members (two house, two senate) and adjusts advisory council representation to one house and one senate member appointed by legislative management.