SB 1702

Present law authorizes l ocal governments to add their own sales tax of up to 2.75% through a local ordinance or resolution. However, they can only apply that tax to the first $1,600 of the price of any single item of personal property . If a county has not maxed out its local sales tax of 2.75%, then a city or town inside the county can add its own tax to reach the maximum. That city or town may then decide to either tax food at a lower rate or not at all. Once the incorporated city or town passes the o rdinance to charge a local tax and sends a certified copy to the department of revenue , the change becomes effective after 60 days . METROPOLITAN GOVERNMENTS This bill authorizes metropolitan government s to levy a tax in the same way a city or town is permitted to, as outlined above. A metropolitan government may either tax food and food ingredients for human consumption at a lower rate , or e xempt from the city tax rate the retail sale of food and food ingredients , within the metropolitan government. However, such an exemption does not affect the continued collection by a metropolitan government of a local option transit surcharge levied on the retail sale of food and food ingredients. This bill requires the metropolitan government to send a certified copy of the adopted resolution to the department of revenue. The reduced tax rate or exemption becomes effective 60 days after the department receives the certified copy . For metropolitan governments, t he reduced tax rate or exemption applies only to tax periods beginning on or after October 1, 2026.