Construction Excise Tax - SB 1036

Description

Bandon School District Construction Excise Tax (CET) Information What is the Construction Excise Tax (CET)? Passed in 2007, SB 1036 allows school districts to impose a tax on new construction, calculated based on the square footage of improvements. The tax applies to most new residential and non-residential developments, with exemptions for affordable housing, public buildings, agricultural buildings, hospitals, private schools, and religious facilities. Revenues from the Construction Excise Tax (CET) are required to be used for capital improvements to school facilities. The tax is collected by local governments or entities that issue permits for structural improvements regulated by the state building code. The Construction Excise Tax is crucial for funding the necessary capital improvements that ensure our schools have the infrastructure, safety, and resources needed to provide an excellent education for our students. It is important to note that the revenue generated by SB 1036 alone will not be enough to fully fund the costs of infrastructure, meaning voterapproved bonds will still be needed and are crucial to the safe and healthy learning environment for our students. CET Rates The following rates apply to construction projects within the Bandon School District for the upcoming fiscal years: Fiscal Year Residential Rate Non-Residential Rate Non-Residential Maximum 2024-25 $1.63 per square foot $0.82 per square foot $40,800 2025-26 $1.67 per square foot $0.84 per square foot $41,800 Residential Rate: Applied to new residential construction or additions to existing homes. Non-Residential Rate: Applied to commercial, industrial, and other non-residential developments. Non-Residential Maximum: The maximum tax amount for non-residential projects, regardless of the square footage. How the CET Benefits Bandon Schools The funds collected through the CET can be used for: • Construction, reconstruction, or improvement of school facilities • Expenses for purchasing and installing equipment, furnishings, or other tangible property with a useful life exceeding one year • Architectural, engineering, legal, or other related costs associated with capital improvements • Land acquisition School districts may NOT spend construction excise tax funds on operating costs or costs of routine maintenance.