H103 - 2022 Appropriations Act. (SL 2022-74)

Overview: Part XLII of S.L. 2022-74 makes the following tax-related changes:

• Section 42.1 – Expands the individual income tax exclusion of military retirement pay to include retirement pay for service in all uniformed services. The exclusion enacted in Section 42.1A of S.L. 2021-180 applied only to members of the Armed Forces; this provision extends the exclusion to retirees of the commissioned corps of the National Oceanic and Atmospheric Administration (NOAA) and the U.S. Public Health Service. This provision became effective for taxable years beginning on or after January 1, 2022.
• Section 42.2 – Exempts from sales and use tax purchases by interstate air and ground couriers of certain equipment, including conveyor systems, and related parts and accessories, purchased for use at package sorting facilities. Minimum investment and employment thresholds must be met to be eligible for and to maintain the exemption. This provision became effective July 1, 2022, and applies to purchases made on or after that date.
• Section 42.3 – Transfers a portion of the sales and use tax proceeds, ranging from 2%-6% over three years, to the Highway Fund and Highway Trust Fund for transportation needs. This provision became effective July 1, 2022.
• Section 42.4 – Shifts from annual to quarterly the motor fuel tax refund available for the off-highway use of motor fuel. This provision becomes effective January 1, 2023, and applies to purchases of motor fuel on or after that date.