Education Capital Improvements Sales and Use Tax

2025-2026 Regular Session Introduced by Doug Gilliam

Expands ECI-SUT eligibility to certain small counties with a single school district, under specific timing and tax-history conditions, to fund capital education projects.

Act No. 203

Purpose and Intent

H 4589 proposes to expand the eligibility rules for counties to impose the Education Capital Improvements Sales and Use Tax (ECI-SUT). The bill adds a new subsection to Section 4-10-470 that allows certain counties, which previously did not meet existing collection requirements, to impose the ECI-SUT under specific conditions. The overall goal is to broaden financing options for capital education improvements in qualifying counties, while preserving control over timing and boundaries.

Key Provisions

New eligibility framework (Section 4-10-470(G))

The Education Capital Improvements Sales and Use Tax may be imposed in a county that does not meet the current collection requirements, if all of the following conditions are satisfied:

The county is only imposing the local option sales tax permitted under Article 1.
The county has had that local option tax in place for less than ten years as of the date the ECI-SUT is imposed.
The county is entirely encompassed by one school district.
The county collected less than $50,000 in state accommodations taxes (as imposed under Section 12-36-920(A)) in the most recent fiscal year for which full figures are available.

If a county meets these criteria, it becomes eligible to impose the ECI-SUT under this subsection (G)(1).

Continued eligibility

Once a county becomes eligible under this provision, it remains eligible to impose the ECI-SUT pursuant to subsection (G)(1) in the future (i.e., eligibility does not require ongoing re-testing of the thresholds).

Effectiveness

The act takes effect upon the Governor’s approval (i.e., it becomes law once signed).

Who/What Is Affected

Counties: Counties that currently do not meet the standard collection requirements but fit the subsection (G)(1) criteria could gain the authority to impose the ECI-SUT. Specifically:

Counties with a single school district within their borders.
Counties that have a local option sales tax in place for fewer than ten years.
Counties with state accommodations tax collections below $50,000 in the most recent full year available.

Education capital improvements: The funding mechanism (ECI-SUT) may be used for capital improvements in education in eligible counties.

Procedural and Timeline Aspects

Introduction and referrals: The bill was introduced January 13, 2026, and referred to the Ways and Means Committee; later moved to the Committee with a favorable report (amendment) on April 21, 2026.

Enactment and effective date: The act requires gubernatorial approval to take effect. No specific sunset or renewal dates are provided in the text.

Implementation path: If a county meets the new criteria, it could begin imposing the ECI-SUT under the amended authority, subject to any future rules or resolutions governing the tax.

Summary of Impact

Expands potential use of the Education Capital Improvements Sales and Use Tax to a subset of smaller or newer localities that currently struggle to meet existing collection thresholds.

Maintains safeguards (single school district, recent local option tax history, and relatively low accommodations tax receipts) to identify counties with a smaller tax-base yet a potential need for capital education funding.

Provides a mechanism for broader local funding for school capital projects, potentially accelerating school facility improvements in eligible counties.

Bill