| | | Part B permits municipalities to approve by referendum a | | local option sales tax of either 1% or 2% on prepared food and | | lodging to be collected by the State in conjunction with the | | existing tax on these products and services. The added | | revenue will be counted as though it were derived from an | | increase in the municipality's property valuation. The effect | | of this adjustment is to diminish slightly the municipality's | | revenue sharing and school funding and increase its proportion | | of county taxes. Two percent of the added revenue is kept by | | the State to offset its costs of collection and 5.2% is | | allocated to municipal revenue sharing. |
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| | | Part B also converts excise taxes on motor vehicles and | | watercraft to an equivalent of the local property tax with | | resulting adjustments to revenue sharing, school funding and | | county taxes in the fashion outlined above. |
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| | | Part C divides state-municipal revenue sharing funds equally | | between the Local Government Fund and the Disproportionate Tax | | Burden Fund and changes the threshold for receipt of funds | | from the Disproportionate Tax Burden Fund from 10 mills to 15 | | mills. |
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| | | Part D replaces the current income tax brackets with 3 | | brackets. For persons filing as single individuals, the 2% | | bracket would cover income from $0 to $4,999; the 5% bracket | | would cover income from $5,000 to $19,999; and the 8% bracket | | would cover income of $20,000 and above. The income amounts | | for heads of households are 1.5 times the amounts for single | | individuals and the amounts for joint returns are 2 times the | | amounts for single individuals. Part D also increases the | | personal exemption to equal the federal personal exemption. |
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| | | Part E increases the earned income tax credit from 5% to 20% | | of the federal credit and makes it refundable. |
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| | | Current taxes on beer and wine are imposed in 2 components, | | an excise tax and a premium tax. The excise tax goes to the | | General Fund; the premium tax, added in 1981, supports a fund | | for the prevention of alcoholism. |
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| | | Part F imposes a tax on beer and wine at the uniform rate of | | 12¢ per ounce of the pure alcohol that each contains. The tax | | is broken down as 10¢ for the excise tax to the General Fund | | and 2¢ as the premium tax for the alcoholism prevention fund. | | This will roughly double the revenue to the General Fund and | | produce a slight increase for the prevention fund. |
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| | | Overall, this Part doubles the tax on beer and triples the | | tax on wine, while the tax on sparkling wine is increased by | | about 50%. |
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