Bill reducing sales tax passes House

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Bill reducing sales tax passes House

Reducing the sales tax and repealing the Partridge Amendment is the aim of a bill bound for the Senate.


On a 6-1 vote, members of the House Appropriations committee passed House Bill 1327, which reduces the half-cent tax rate on certain products and repeals the Partridge Amendment, while the full House followed suit and sent it across the hall on a 39-31 vote


Rep. Taffy Howard testified in favor of the bill noting the lowering of the sales tax from 4.5 percent to 4 percent would be done “in two bites” over a two year period in Fiscal Years 2023 and 2024 because at this time the state is “doing phenomenally well” in terms of revenue collections.


Lowering the sales tax would remove more than $150 million from sales tax collections in Fiscal Year’s 2023 and 2024.


Rep. Howard told committee members “even after reducing the sales tax” over the two year period there would still be dollars to spend as there’s a year-to-year assumption of “5 percent growth” in revenue each year and should it fall short there’s money in reserves to make up the loss.


Projections in revenue collections adopted by Appropriators for FY23 only show a 0.3 percent growth in revenue from the prior Fiscal Year.


ASBSD opposes HB 1327 with Executive Director Wade Pogany testifying while revenue collections are good now tough times in terms of revenue collections may return and “reserves are one-time money” that do not provide a long-term “safety net” for funding.


“I’m worried about the long term effect of this. It’s really, really hard to put taxes back,” Pogany said, adding the difficult journey gone through in 2016 to increase the sales tax, which required a 2/3 vote of both House and Senate and it being the first such tax increase since 1968.


“I’m just asking you not to pull this back.”


The bill now moves to the Senate.


For updates on the bill and other pieces of 2022 legislation, check the ASBSD Blog and Billtracker page.


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