H.B. 510 Summary

• Reduces the commercial activity tax (CAT) rate from 2.6 mills to 1.95 mills per dollar of taxable gross receipts, effective for tax periods beginning in fiscal year 2014.

• Lowers minimum tax payments for businesses based on annual gross receipts: from $150 to $112.50 for receipts up to $1 million; from $800 to $600 for $1-2 million; from $2,100 to $1,575 for $2-4 million; and from $2,600 to $1,950 for over $4 million.

• Implements a phased reduction in CAT revenue allocated to the general revenue fund, decreasing from 50% in fiscal year 2013 to 33.3% by fiscal year 2019 and thereafter, with corresponding increases to school district and local government tangible property tax replacement funds.

• Establishes a gradual CAT rate reduction schedule through fiscal year 2019, with multiplier adjustments applied to computed tax amounts in fiscal years 2014-2018 before reaching the final 1.95 mills rate.

• Creates the commercial activity tax motor fuel receipts fund and specifies allocation procedures for debt service payments on bonds for highway and local infrastructure capital improvement projects.