Local governments could lower home tax caps and charge replacement taxes

A county, city, or town could set a lower property tax cap for qualifying homes. The cap could be anywhere from 0% to less than 1% of a home's assessed value. It would apply only when calculating the adopting government's property tax revenue. Local officials would have to pass an ordinance. The lower cap would first apply to taxes due the year after adoption and continue while the ordinance remains in effect.

A county, city, or town could charge a 1% local sales tax. The tax would cover purchases subject to state sales tax and assigned to the adopting area. Officials could charge it only in years when their lower home tax cap applies. They could use the money only to replace their own lost property tax revenue. The sales tax could start on the first day of a calendar quarter, at least 60 days after officials adopt it.

A county, city, or town could add up to 0.5% to local income taxes. The tax would cover people counted as local taxpayers for the adopting county, city, or town, including residents. Officials could use the money only to replace their own lost property tax revenue. Officials could charge this tax only in years when their lower home tax cap applies.

A county, city, or town could tax businesses that provide short hotel stays and similar lodging. The tax would cover qualifying lodging in the adopting county, city, or town. The rate could not exceed 5%. Stays of 30 days or more would be exempt. Student residence hall stays for courses that earn college credit at a college in the county would be exempt. Officials could use the money only to replace their own lost property tax revenue. Officials could charge this tax only in years when their lower home tax cap applies.

A county, city, or town could tax covered food and drink sales at up to 1%. The tax would cover food and drinks prepared or served for a price in the adopting area. Sales exempt from state sales tax would also be exempt from this tax. Officials could use the money only to replace their own lost property tax revenue. Officials could charge this tax only in years when their lower home tax cap applies.