Retail Sales and Use Tax.  Retail sales taxes are imposed on retail sales of most articles of tangible personal property, digital products, and some services. A retail sale is a sale to the final consumer or end user of the property, digital product, or service.  If retail sales taxes were not collected when the user acquired the property, digital products, or services, then use tax applies to the value of property, digital product, or service when used in this state.  The state, all counties, and cities levy retail sales and use taxes. The state sales and use tax rate is 6.5 percent; local sales and use tax rates vary depending on the location.

Local Sales and Use Tax for Housing and Related Services.   A city or county legislative authority may impose a 0.1 percent sales and use tax to fund housing and related services.  A minimum of 60 percent of revenues collected must be used as follows:

• for constructing or acquiring affordable housing, facilities providing housing-related services, or mental and behavioral health-related services, or acquiring land for these purposes; or
• to fund the operations and maintenance costs of newly constructed affordable housing, facilities providing housing-related services, or evaluation and treatment centers.

The affordable housing and facilities providing housing-related programs must serve any of the following individuals with income below 60 percent of area median income:

• individuals with behavioral health disabilities;
• veterans;
• senior citizens;
• homeless persons;
• unaccompanied homeless youth;
• persons with disabilities; or
• domestic violence victims.

The remainder of the money collected must be used for the operation, delivery, or evaluation of mental and behavioral health treatment programs and services or housing related services.

Local Mental Health and Chemical Dependency Sales and Use Tax.   All counties and certain cities may impose, by councilmanic action, a mental health and chemical dependency sales and use tax up to 0.1 percent.  A county that has not imposed the tax prior to October 9, 2015, but imposes the tax after a city in that county has imposed the tax must enter into an interlocal agreement with that city to determine how the services will be allocated and funded in the city.  Revenue from the tax must be used for expenses related to the operation or delivery of chemical dependency or mental health treatment programs or services, including, but not limited to, therapeutic court programs, treatment services, case management, transportation, and housing that are components of a treatment program or service.

Local Sales and Use Tax for Affordable and Supportive Housing.  Local jurisdictions may impose a local state-shared sales and use tax to fund affordable or supportive housing.  The maximum rate imposed may not exceed either 0.0146 percent or 0.0073 percent.  The tax is credited against the state sales tax collected in the jurisdiction.  Funds from this tax must be used for the following:

• acquisition, rehabilitation, or construction of affordable housing;
• funding the operations and maintenance costs of new units of affordable or supportive housing; or
• providing rental assistance to tenants.

Housing and services may only be provided to persons whose income is at or below 60 percent of the median income of the county or city imposing the tax, or at or below 80 percent of the median income of  the county or city imposing the tax if it is supporting the development of affordable housing intended for owner occupancy.

Affordable Housing for All Account.  The state and local affordable housing and homeless programs receive funding from a $183 surcharge collected by each county auditor when certain documents are recorded.  Of the $183 surcharge, 13.1 percent is distributed to the Affordable Housing for All Account.  The Department of Commerce (Commerce) may use up to 10 percent for program administration and technical assistance.  At least 90 percent must be used for: 

• grants for building operations and maintenance costs of housing projects, or units with housing projects in the state's Housing Trust Fund portfolio, are affordable to extremely low-income household, and require a supplement to rent income to cover ongoing operating expenses; and
• grants to support the building operations, maintenance, and supportive services costs for permanent supportive housing projects, or units within housing projects, that have received public capital funding.

Property Tax.  All real and personal property is subject to a tax each year based on the highest and best use, unless a specific exemption is provided by law.  The county assessor determines assessed value for each property and calculates property taxes. The aggregate of all regular tax levies upon real and personal property by the state and all taxing districts may not exceed 1 percent of the true and fair value of the property, or $10 per $1,000 of assessed valuation.  

Property Tax Exemptions.  There are several exemptions from property tax. Some exemptions are available for housing-related properties such as property used by nonprofit organizations in providing emergency or transitional housing for low-income homeless persons or victims of domestic violence who are homeless if:

• the charge, if any, for the housing does not exceed the actual cost of operating and maintaining the housing; and
• the property is owned, rented, or leased by the nonprofit.

Emergency housing means a project that provides housing and supportive services to homeless persons or families for up to 60 days.  Transitional housing means a project that provides housing and supportive services to homeless persons or families for up to two years and has as its purpose facilitating the movement of homeless persons and families to independent living.

Local Sales and Use Tax for Housing and Related Services.  Authorization is added for at least 60 percent of the money to be used for funding the operation and maintenance of existing units of affordable housing and facilities where housing-related programs are provided and rehabilitating existing affordable housing, which may include emergency, transitional, and supportive housing.

For the remainder of the funds, authorization is added for:

• affordable and supportive housing operation and maintenance; or
• rental assistance.

A county or city may enter into an interlocal agreement with one or more counties, cities, or public housing authorities to pool the tax receipts, pledge those taxes to bond issued by one or more parties to the agreement, or allocate the proceeds of the taxes or bonds in accordance with such interlocal agreement and statutory requirements.

Local Mental Health and Chemical Dependency Sales and Use Tax.   A county that imposes the tax after a city in that county has imposed the tax must consult, rather than enter into an interlocal agreement, with that city to determine how the services will be allocated and funded in the city. 

Local Sales and Use Tax for Affordable and Supportive Housing.  Authorization is added for the money to be used for funding the operation and maintenance of existing units of affordable or supportive housing.

Affordable Housing for All Account.  The requirements for the 90 percent portion of the funding in the affordable housing for all account are amended to clarify that housing projects must be affordable to extremely low-income households with incomes at or below 30 percent of the area median income at the time of move-in and remove language that the project require a supplement to rent income to cover ongoing expenses. 

Eligible uses are added for grant funds to support the building, operations, maintenance and supportive service costs for permanent supportive housing projects or units within those projects that have or will receive funding from the Housing Trust Fund or other public capital funding programs to include:

• resident services, such as programming, community events, and building activities;
• essential ancillary services necessary to assist program participants who are not covered or are partially covered by Medicaid or other health insurance obtain and maintain housing;
• resident needs for basic living and well-being;
• essential maintenance and upkeep; and
• essential case management and other resources with demonstrable connection to resident well-being and housing stability.

When awarding grants Commerce:

• may not impose a cap on administrative or overhead costs for grantees of less than 15 percent of the grant award;
• shall seek to promote continuity of operations and stability for existing projects; and
• must require grantees maintain supporting documentation for all expenses above $50—Commerce may not require the submission of  supporting documentation before approving reimbursement requests except for cause or auditing purposes.

Property Tax Exemption.  The definition for emergency housing for the purpose of property tax exemptions for nonprofit organizations in providing emergency or transitional housing for low-income persons or victims of domestic violence who are homeless is updated.  Emergency housing means temporary indoor accommodations for individuals or families who are homeless or at imminent risk of becoming homeless that is intended to address the basic health, food, clothing, and personal hygiene needs of individuals or families.