The local option sales and use tax may be discontinued by referendum conducted in the same manner as the referendum adopting the tax under this section.

9.__Effective date of tax.__The tax authorized by this section takes effect 120 days after the municipal referendum vote under subsection 8 if it is accepted by a majority of the local voters voting at the election and the total number of votes cast equals or exceeds 20% of the total number of votes cast in that municipality in the most recent gubernatorial election.

SUMMARY

This bill allows municipalities to impose a 1% local option sales and use tax. Revenue from the tax, after the deduction of administrative costs, is divided between the municipality and the county in which the municipality is located on a 75/25 basis, respectively.

A municipality must use the revenue generated by the local option sales and use tax to reduce the property tax rate. If, despite the use of all the revenue generated by the local option sales and use tax, the property tax rate, after adjustment for inflation, can not be decreased below a level that is 1% higher than the previous year's property tax rate, then this bill requires a 2/3 vote of the governing body of the municipality to pass the budget containing the higher tax rate.