HB 2590

House Bill (HB) 2590: TPT reform; contractors

Sponsor: Representative Fann

Overview: HB 2590 clarifies definitions, provides a bright-line test to determine which construction projects are subject to tax, and clarifies which contractors should keep TPT licenses.

League Position: SUPPORT - The League supports this bill as it is important to TPT reform.

Summary: HB 2590 clarifies the definitions of the terms "replacement" and "alteration"; provides bright-line tests for both residential and non-residential alteration projects to determine when they are subject to tax on materials as opposed to being considered prime contracting; and, clarifies which contractors should keep their TPT license going forward. The bill allows licensed contractors who are doing alteration projects to continue buying all materials without tax, provided they pay retail TPT on the materials to the jurisdiction where the project is being done.

Updates

02/16/15 and 2/19/15: The bill passed the Ways and Means Committee by a vote of 9-0. Its companion bill, Senate Bill (SB) 1446, passed out of the Senate by a vote of 28-1-1. SB 1446 was then substituted in place of HB 2590, and passed out of the House by a vote of 57-0-3. Based on these vote totals, the bill's emergency clause will be effective, so the changes go into effect immediately on signature of the Governor, with a retroactive date of January 1, 2015.

02/19/15: SB 1446 was substituted was HB 2590 and was transmitted to the governor.