Provide good standing exemption for contractor gross receipts tax

2025 Regular Session

LC 1000 would grant a good standing exemption from the contractor gross receipts tax for eligible contractors, reducing tax for those in compliance.

(LC) Draft Ready for Delivery

#highwaysandroads #planninganddevelopment #revenue #state #rulemaking #stategovernment #taxation(generally)

Overview

LC 1000 is a bill introduced on November 11, 2024, identified as a “Drafter Ready for Delivery” in the Legislative Counsel (LC) process. The bill aims to provide a good standing exemption from the contractor gross receipts tax. It falls under topics related to highways and roads, planning and development, revenue, state government, rule making, taxation, and general governance.

Purpose and Intent

The primary purpose is to create or codify a good standing exemption for the contractor gross receipts tax.

The exemption is conditioned on contractors being in “good standing” with the state, though the specific criteria for good standing are not detailed in the available information.

The measure signals an intent to reduce or waive contractor gross receipts tax obligations for qualifying contractors, subject to regulatory definitions and implementation.

Key Provisions (as implied by bill title and subject)

Establishment of a good standing exemption from the contractor gross receipts tax.

Potential definition or criteria for “good standing” to determine eligibility (exact criteria not provided here).

Administrative and rulemaking components to implement the exemption, indicating involvement by state government agencies and the relevant tax authority.

Possible alignment with related duties in highways, roads, and planning contexts, given the bill’s subject matter areas.

Affected Parties

Contractors subject to the contractor gross receipts tax who meet the good standing criteria.

State tax or revenue authorities responsible for implementing the exemption and issuing guidance or rules.

Entities involved in highway and road planning and development that engage contractor services, potentially benefiting from the exemption.

Procedural and Timeline Aspects

Introduced: November 11, 2024.

Legislative actions progression (highlights):

November 11, 2024: Drafter Assigned.
December 16, 2024: Draft On Hold.
March 17–20, 2025: Draft Taken Off Hold; Drafts in various stages (Edit, Legal Review, Input/Proofing, Final Drafter Review, Assembly) and final readiness for delivery.

Current status: (LC) Draft Ready for Delivery as of March 20, 2025.

Potential Fiscal and Policy Implications

Possible reduction in state revenue received from the contractor gross receipts tax for eligible entities.

Administrative costs or complexity associated with defining “good standing” and implementing the exemption through rules.

The precise fiscal impact depends on the scope of the exemption, eligibility criteria, effective date, and how it interacts with existing tax provisions.

Next Steps and Considerations

If enacted, the bill would proceed through hearings and votes in the applicable legislative chamber, followed by the other chamber and potential amendments.

Key questions for stakeholders: How is “good standing” defined? What is the effective date and any transitional provisions? How will the exemption be administered and verified? What are the anticipated revenue and regulatory costs?

Note: The summary reflects information provided about LC 1000 and does not contain details beyond what is stated in the bill’s summary and legislative actions.

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