Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 18 Fifth Substitute (2021GS)

Sponsor

Sen. Harper, W.

Final action

Governor Signed 3/22/2021

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• modifies the qualifications for tangible personal property tax to be exempt from property tax; and
• excludes the revenue generated from the increase in the amount of the exemption that is based on aggregate taxable value in the county from the certified tax rate calculation.

Every vote on this bill

Bill text

PROPERTY TAX EXEMPTION AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Wayne A. Harper
House Sponsor: 
Karianne Lisonbee
LONG TITLE
General Description:
This bill modifies the Property Tax Act.
Highlighted Provisions:
This bill:
▸ modifies the qualifications for tangible personal property tax to be exempt from
property tax; and
▸ excludes the revenue generated from the increase in the amount of the exemption
that is based on aggregate taxable value in the county from the certified tax rate
calculation.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
59-2-924
, as last amended by Laws of Utah 2020, Chapters 305 and 354
59-2-1115
, as last amended by Laws of Utah 2020, Chapters 38 and 42
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
59-2-924
 is amended to read:
59-2-924.
Definitions -- Report of valuation of property to county auditor and
commission -- Transmittal by auditor to governing bodies -- Calculation of certified tax
rate -- Rulemaking authority -- Adoption of tentative budget -- Notice provided by the
commission.
(1) As used in this section:
(a) (i) "Ad valorem property tax revenue" means revenue collected in accordance with
this chapter.
(ii) "Ad valorem property tax revenue" does not include:
(A) interest;
(B) penalties;
(C) collections from redemptions; or
(D) revenue received by a taxing entity from personal property that is semiconductor
manufacturing equipment assessed by a county assessor in accordance with Part 3, County
Assessment.
(b) "Adjusted tax increment" means the same as that term is defined in Section
17C-1-102
.
(c) (i) "Aggregate taxable value of all property taxed" means:
(A) the aggregate taxable value of all real property a county assessor assesses in
accordance with Part 3, County Assessment, for the current year;
(B) the aggregate taxable value of all real and personal property the commission
assesses in accordance with Part 2, Assessment of Property, for the current year; and
(C) the aggregate year end taxable value of all personal property a county assessor
assesses in accordance with Part 3, County Assessment, contained on the prior year's tax rolls
of the taxing entity.
(ii) "Aggregate taxable value of all property taxed" does not include the aggregate year
end taxable value of personal property that is:
(A) semiconductor manufacturing equipment assessed by a county assessor in
accordance with Part 3, County Assessment; and
(B) contained on the prior year's tax rolls of the taxing entity.
(d) "Base taxable value" means:
(i) for an authority created under Section 
11-58-201
, the same as that term is defined in
Section 
11-58-102
;
(ii) for an agency created under Section 
17C-1-201.5
, the same as that term is defined
in Section 
17C-1-102
;
(iii) for an authority created under Section 
63H-1-201
, the same as that term is defined
in Section 
63H-1-102
; or
(iv) for a host local government, the same as that term is defined in Section 
63N-2-502
.
(e) "Centrally assessed benchmark value" means an amount equal to the highest year
end taxable value of real and personal property the commission assesses in accordance with
Part 2, Assessment of Property, for a previous calendar year that begins on or after January 1,
2015, adjusted for taxable value attributable to:
(i) an annexation to a taxing entity; or
(ii) an incorrect allocation of taxable value of real or personal property the commission
assesses in accordance with Part 2, Assessment of Property. 
(f) (i) "Centrally assessed new growth" means the greater of:
(A) zero; or
(B) the amount calculated by subtracting the centrally assessed benchmark value
adjusted for prior year end incremental value from the taxable value of real and personal
property the commission assesses in accordance with Part 2, Assessment of Property, for the
current year, adjusted for current year incremental value.
(ii) "Centrally assessed new growth" does not include a change in value as a result of a
change in the method of apportioning the value prescribed by the Legislature, a court, or the
commission in an administrative rule or administrative order.
(g) "Certified tax rate" means a tax rate that will provide the same ad valorem property
tax revenue for a taxing entity as was budgeted by that taxing entity for the prior year.
(h) "Eligible new growth" means the greater of:
(i) zero; or
(ii) the sum of:
(A) locally assessed new growth;
(B) centrally assessed new growth; and
(C) project area new growth or hotel property new growth.
(i) "Host local government" means the same as that term is defined in Section
63N-2-502
.
(j) "Hotel property" means the same as that term is defined in Section 
63N-2-502
.
(k) "Hotel property new growth" means an amount equal to the incremental value that
is no longer provided to a host local government as incremental property tax revenue.
(l) "Incremental property tax revenue" means the same as that term is defined in
Section 
63N-2-502
.
(m) "Incremental value" means:
(i) for an authority created under Section 
11-58-201
, the amount calculated by
multiplying:
(A) the difference between the taxable value and the base taxable value of the property
that is located within a project area and on which property tax differential is collected; and
(B) the number that represents the percentage of the property tax differential that is
paid to the authority;
(ii) for an agency created under Section 
17C-1-201.5
, the amount calculated by
multiplying:
(A) the difference between the taxable value and the base taxable value of the property
located within a project area and on which tax increment is collected; and
(B) the number that represents the adjusted tax increment from that project area that is
paid to the agency;
(iii) for an authority created under Section 
63H-1-201
, the amount calculated by
multiplying:
(A) the difference between the taxable value and the base taxable value of the property
located within a project area and on which property tax allocation is collected; and
(B) the number that represents the percentage of the property tax allocation from that
project area that is paid to the authority; or
(iv) for a host local government, an amount calculated by multiplying:
(A) the difference between the taxable value and the base taxable value of the hotel
property on which incremental property tax revenue is collected; and
(B) the number that represents the percentage of the incremental property tax revenue
from that hotel property that is paid to the host local government.
(n) (i) "Locally assessed new growth" means the greater of:
(A) zero; or
(B) the amount calculated by subtracting the year end taxable value of real property the
county assessor assesses in accordance with Part 3, County Assessment, for the previous year,
adjusted for prior year end incremental value from the taxable value of real property the county
assessor assesses in accordance with Part 3, County Assessment, for the current year, adjusted
for current year incremental value.
(ii) "Locally assessed new growth" does not include a change in:
(A) value as a result of factoring in accordance with Section 
59-2-704
, reappraisal, or
another adjustment;
(B) assessed value based on whether a property is allowed a residential exemption for a
primary residence under Section 
59-2-103
;
(C) assessed value based on whether a property is assessed under Part 5, Farmland
Assessment Act; or
(D) assessed value based on whether a property is assessed under Part 17, Urban
Farming Assessment Act.
(o) "Project area" means:
(i) for an authority created under Section 
11-58-201
, the same as that term is defined in
Section 
11-58-102
;
(ii) for an agency created under Section 
17C-1-201.5
, the same as that term is defined
in Section 
17C-1-102
; or
(iii) for an authority created under Section 
63H-1-201
, the same as that term is defined
in Section 
63H-1-102
.
(p) "Project area new growth" means:
(i) for an authority created under Section 
11-58-201
, an amount equal to the
incremental value that is no longer provided to an authority as property tax differential;
(ii) for an agency created under Section 
17C-1-201.5
, an amount equal to the
incremental value that is no longer provided to an agency as tax increment; or
(iii) for an authority created under Section 
63H-1-201
, an amount equal to the
incremental value that is no longer provided to an authority as property tax allocation.
(q) "Property tax allocation" means the same as that term is defined in Section
63H-1-102
.
(r) "Property tax differential" means the same as that term is defined in Section
11-58-102
.
(s) "Qualifying exempt revenue" means revenue received:
(i) for the previous calendar year;
(ii) by a taxing entity;
(iii) from tangible personal property contained on the prior year's tax rolls that is
exempt from property tax under Subsection 
59-2-1115
(2)(b) for a calendar year beginning on
January 1, 2022; and
(iv) on the aggregate 2021 year end taxable value of the tangible personal property that
exceeds $15,300.
[
(s)
] 
(t)
 "Tax increment" means the same as that term is defined in Section 
17C-1-102
.
(2) Before June 1 of each year, the county assessor of each county shall deliver to the
county auditor and the commission the following statements:
(a) a statement containing the aggregate valuation of all taxable real property a county
assessor assesses in accordance with Part 3, County Assessment, for each taxing entity; and
(b) a statement containing the taxable value of all personal property a county assessor
assesses in accordance with Part 3, County Assessment, from the prior year end values.
(3) The county auditor shall, on or before June 8, transmit to the governing body of
each taxing entity:
(a) the statements described in Subsections (2)(a) and (b);
(b) an estimate of the revenue from personal property;
(c) the certified tax rate; and
(d) all forms necessary to submit a tax levy request.
(4) (a) Except as otherwise provided in this section, the certified tax rate shall be
calculated by dividing the ad valorem property tax revenue that a taxing entity budgeted for the
prior year 
minus the qualifying exempt revenue
 by the amount calculated under Subsection
(4)(b).
(b) For purposes of Subsection (4)(a), the legislative body of a taxing entity shall
calculate an amount as follows:
(i) calculate for the taxing entity the difference between:
(A) the aggregate taxable value of all property taxed; and
(B) any adjustments for current year incremental value;
(ii) after making the calculation required by Subsection (4)(b)(i), calculate an amount
determined by increasing or decreasing the amount calculated under Subsection (4)(b)(i) by the
average of the percentage net change in the value of taxable property for the equalization
period for the three calendar years immediately preceding the current calendar year;
(iii) after making the calculation required by Subsection (4)(b)(ii), calculate the product
of:
(A) the amount calculated under Subsection (4)(b)(ii); and
(B) the percentage of property taxes collected for the five calendar years immediately
preceding the current calendar year; and
(iv) after making the calculation required by Subsection (4)(b)(iii), calculate an amount
determined by:
(A) multiplying the percentage of property taxes collected for the five calendar years
immediately preceding the current calendar year by eligible new growth; and
(B) subtracting the amount calculated under Subsection (4)(b)(iv)(A) from the amount
calculated under Subsection (4)(b)(iii).
(5) A certified tax rate for a taxing entity described in this Subsection (5) shall be
calculated as follows:
(a) except as provided in Subsection (5)(b), for a new taxing entity, the certified tax
rate is zero;
(b) for a municipality incorporated on or after July 1, 1996, the certified tax rate is:
(i) in a county of the first, second, or third class, the levy imposed for municipal-type
services under Sections 
17-34-1
 and 
17-36-9
; and
(ii) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
purposes and such other levies imposed solely for the municipal-type services identified in
Section 
17-34-1
 and Subsection 
17-36-3
(23); and
(c) for debt service voted on by the public, the certified tax rate is the actual levy
imposed by that section, except that a certified tax rate for the following levies shall be
calculated in accordance with Section 
59-2-913
 and this section:
(i) a school levy provided for under Section 
53F-8-301
, 
53F-8-302
, or 
53F-8-303
; and
(ii) a levy to pay for the costs of state legislative mandates or judicial or administrative
orders under Section 
59-2-1602
.
(6) (a) A judgment levy imposed under Section 
59-2-1328
 or 
59-2-1330
 may be
imposed at a rate that is sufficient to generate only the revenue required to satisfy one or more
eligible judgments.
(b) The ad valorem property tax revenue generated by a judgment levy described in
Subsection (6)(a) may not be considered in establishing a taxing entity's aggregate certified tax
rate.
(7) (a) For the purpose of calculating the certified tax rate, the county auditor shall use:
(i) the taxable value of real property:
(A) the county assessor assesses in accordance with Part 3, County Assessment; and
(B) contained on the assessment roll;
(ii) the year end taxable value of personal property:
(A) a county assessor assesses in accordance with Part 3, County Assessment; and
(B) contained on the prior year's assessment roll; and
(iii) the taxable value of real and personal property the commission assesses in
accordance with Part 2, Assessment of Property.
(b) For purposes of Subsection (7)(a), taxable value does not include eligible new
growth.
(8) (a) On or before June 30, a taxing entity shall annually adopt a tentative budget.
(b) If a taxing entity intends to exceed the certified tax rate, the taxing entity shall
notify the county auditor of:
(i) the taxing entity's intent to exceed the certified tax rate; and
(ii) the amount by which the taxing entity proposes to exceed the certified tax rate.
(c) The county auditor shall notify property owners of any intent to levy a tax rate that
exceeds the certified tax rate in accordance with Sections 
59-2-919
 and 
59-2-919.1
.
(9) (a) Subject to Subsection (9)(d), the commission shall provide notice, through
electronic means on or before July 31, to a taxing entity and the Revenue and Taxation Interim
Committee if:
(i) the amount calculated under Subsection (9)(b) is 10% or more of the year end
taxable value of the real and personal property the commission assesses in accordance with
Part 2, Assessment of Property, for the previous year, adjusted for prior year end incremental
value; and
(ii) the amount calculated under Subsection (9)(c) is 50% or more of the total year end
taxable value of the real and personal property of a taxpayer the commission assesses in
accordance with Part 2, Assessment of Property, for the previous year.
(b) For purposes of Subsection (9)(a)(i), the commission shall calculate an amount by
subtracting the taxable value of real and personal property the commission assesses in
accordance with Part 2, Assessment of Property, for the current year, adjusted for current year
incremental value, from the year end taxable value of the real and personal property the
commission assesses in accordance with Part 2, Assessment of Property, for the previous year,
adjusted for prior year end incremental value.
(c) For purposes of Subsection (9)(a)(ii), the commission shall calculate an amount by
subtracting the total taxable value of real and personal property of a taxpayer the commission
assesses in accordance with Part 2, Assessment of Property, for the current year, from the total
year end taxable value of the real and personal property of a taxpayer the commission assesses
in accordance with Part 2, Assessment of Property, for the previous year.
(d) The notification under Subsection (9)(a) shall include a list of taxpayers that meet
the requirement under Subsection (9)(a)(ii).
Section 2. Section 
59-2-1115
 is amended to read:
59-2-1115.
Exemption of certain tangible personal property.
(1) As used in this section:
(a) (i) "Item of taxable tangible personal property" does not include an improvement to
real property or a part that will become an improvement.
(ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules defining the term "item of taxable tangible personal property."
(b) (i) "Taxable tangible personal property" means tangible personal property that is
subject to taxation under this chapter.
(ii) "Taxable tangible personal property" does not include:
(A) tangible personal property required by law to be registered with the state before it
is used on a public highway, public waterway, or public land or in the air;
(B) a mobile home as defined in Section 
41-1a-102
; or
(C) a manufactured home as defined in Section 
41-1a-102
.
(2) (a) 
In accordance with Utah Constitution, Article XIII, Section 3, Subsection
(2)(a)(vi), which provides that the Legislature may by statute exempt tangible personal property
that, if subject to property tax, would generate an inconsequential amount of revenue, the
Legislature exempts the tangible personal property described in this Subsection (2).
(b)
 The taxable tangible personal property of a taxpayer is exempt from taxation if the
taxable tangible personal property has a total aggregate taxable value per county of [
$15,000
]
$25,000
 or less.
[
(b) In addition to the exemption under Subsection (2)(a), an item of taxable tangible
personal property, except for an item of noncapitalized personal property as defined in Section
59-2-108
, is exempt from taxation if the item of taxable tangible personal property:
]
[
(i) has an acquisition cost of $1,000 or less;
]
[
(ii) has reached a percent good of 15% or less according to a personal property
schedule published by the commission pursuant to Section 
59-2-107
; and
]
[
(iii) is in a personal property schedule with a residual value of 15% or less.
]
(c) For an item of taxable tangible personal property that is not exempt under
Subsection [
(2)(a) or (b)
] 
(2)(b)
, the item is exempt from taxation if:
[
(i) (A) the item is owned by a business and is not critical to the actual business
operation of the business; or
]
[
(B) beginning January 1, 2021,
]
(i)
 the item is owned by a business 
and is not critical to the actual business operation of
the business
; and
(ii) the acquisition cost of the item is[
:
] 
less than $500.
[
(A) less than $150; or
]
[
(B) beginning January 1, 2021, less than $500.
]
(3) (a) For a calendar year beginning on or after January 1, [
] 
, the
commission shall increase the dollar amount described in Subsection (2)[
(a)
]
(b)
:
(i) by a percentage equal to the percentage difference between the consumer price
index for the preceding calendar year and the consumer price index for calendar year [
]
; and
(ii) up to the nearest $100 increment.
(b) For purposes of this Subsection (3), the commission shall calculate the consumer
price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
(c) If the percentage difference under Subsection (3)(a)(i) is zero or a negative
percentage, the consumer price index increase for the year is zero.
(4) (a) For the first calendar year in which a taxpayer qualifies for an exemption
described in Subsection (2)[
(a)
]
(b)
, a county assessor may require the taxpayer to file a signed
statement described in Section 
59-2-306
.
(b) Notwithstanding Section 
59-2-306
 and subject to Subsection (5), for a calendar
year in which a taxpayer qualifies for an exemption described in Subsection (2)[
(a)
]
(b)
 after the
calendar year described in Subsection (4)(a), a signed statement described in Section 
59-2-306
with respect to the taxable tangible personal property that is exempt under Subsection
(2)[
(a)
]
(b)
 may only require the taxpayer to certify, under penalty of perjury, that the taxpayer
qualifies for the exemption under Subsection (2)[
(a)
]
(b)
.
(c) If a taxpayer qualifies for an exemption described in Subsection (2)[
(a)
]
(b)
 for five
consecutive years and files a signed statement for each of those years in accordance with
Section 
59-2-306
 and Subsection (4)(b), a county assessor may not require the taxpayer to file a
signed statement for each continuing consecutive year for which the taxpayer qualifies for the
exemption.
(d) If a taxpayer qualifies for an exemption described in Subsection [
(2)(b) or
] 
(2)
(c)
for an item of tangible taxable personal property, a county assessor may not require the
taxpayer to include the item on a signed statement described in Section 
59-2-306
.
(5) A signed statement with respect to qualifying exempt primary residential rental
personal property is as provided in Section 
59-2-103.5
.
(6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules to administer this section and provide for uniform
implementation.
Section 3. 
Effective date.
This bill takes effect on January 1, 2022.