Cabinet approves rules to lower business rent tax

The Cabinet has approved new rules to administer a cut on the sales tax on commercial leases, or business rent tax, from 4.5% to 2%.

The cut was long ordained. Lawmakers passed a measure to cut the tax from 5.5% to 2% in 2021, with the cut triggered when the unemployment insurance trust fund, which was depleted by the COVID pandemic, was replenished to its pre-pandemic level of $4.1 billion. A later measure cut the tax to 4.5% in the interim.

The Department of Commerce announced that the fund had reached that amount on March 21, triggering the cut as of June 1.

New administrative rules, though, are needed to implement the cut, and the Cabinet approved the Department of Revenue’s request with little discussion.