HB 2376, which passed overwhelmingly in the House and Senate, is destined for Hull's veto. The bill would have exempted general contractors who had signed a long-term contract prior to June 1 from paying a hike in the state sales tax. On June 1, the state sale tax rate will go from 5% to 5.6%. A governor's spokesman affirms that Hull doesn't intend to exempt families from the increase sales tax and won't allow the contractors' bill to become law.
A veto would be sure to set off a wave of lawsuits from contractors who claim they are taking the brunt of the new tax. Contractors say that the sales tax increase places an unfair burden on them because they negotiated and signed long-term contracts that were based on the 5%. The additional 0.6% that they will have to pay will come directly out of their pockets, they say.
It's been more than a decade for a state sales tax hike. The session is expected to be wrapped up in the next few days and supporters have doubts about whether an override of Hull's veto can be accomplished in time.
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