SB0265 - Elimination of property tax on homesteads.

1 Co-Sponsor

Elimination of property tax on homesteads. Changes the credit for excessive property taxes for homesteads from the amount by which a person's property tax liability attributable to the person's homestead exceeds 1% of the gross assessed value of the property that is the basis for determination of property taxes for the calendar year to an amount equal to the person's property tax liability attributable to the person's homestead. Excludes from the credit any portion of a person's property tax liability that was approved by voters in a referendum and that would not ordinarily be subject to a credit for excessive property taxes. Allows a county's adopting body to adjust the tax rate imposed on the adjusted gross income of local taxpayers in the county based on the actual property taxes that were due and payable during 2024 to compensate for the amount of any tax revenue shortfall incurred as a result of the reduction in tax revenue attributable to the increase in the credit amount. For years beginning after December 31, 2024, requires the department of local government finance (department) to, before July 1 of the year in which property taxes are first due and payable, estimate the amount of any tax revenue shortfall incurred by the county in the year in which the property taxes are first due and payable as a result of the reduction in tax revenue attributable to the increase in the credit amount. For years beginning after December 31, 2024, allows a county's adopting body to adjust the tax rate imposed on the adjusted gross income of local taxpayers in the county in accordance with the estimate to compensate for the amount of any property tax revenue shortfall incurred by the county in the year in which the property taxes are first due and payable as a result of the reduction in tax revenue attributable to the increase in the credit amount. Provides that the maximum tax rate that may be imposed on the adjusted gross income of local taxpayers in a county after an adjustment may not exceed 2.9% in addition to: (1) the maximum allowed property tax relief rate in the county; (2) the maximum allowed local income tax expenditure rate in the county; and (3) the maximum allowed special purpose tax rate in the county. Provides that a county's adopting body, at its discretion, may increase the adjustment by an additional rate of 0.25%. Requires the revenue collected as a result of the adjustment to the tax rate imposed on the adjusted gross income of local taxpayers in the county to be treated as property taxes for all purposes. Requires the department to approve, in a manner determined by the department, the estimate, the corresponding adjustment, and the use of the revenue for each county. Increases, from $3,000 to $9,000, the amount an individual who rents a dwelling for use as the individual's principal place of residence may deduct from the individual's adjusted gross income. Makes conforming changes.