First Substitute H.B. 41

Representative Patrick Painter proposes the following substitute bill:

1 PROPERTY TAXATION OF BUSINESS PERSONAL
2 PROPERTY
3 2012 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Patrick Painter
6 Senate Sponsor: Curtis S. Bramble
7
8 LONG TITLE
9 General Description:
10 This bill adjusts a property tax exemption for business personal property.
11 Highlighted Provisions:
12 This bill:
13 . increases a property tax exemption for business personal property; and
14 . makes technical and conforming changes.
15 Money Appropriated in this Bill:
16 None
17 Other Special Clauses:
18 This bill takes effect on January 1, 2013.
19 Utah Code Sections Affected:
20 AMENDS:
21 59-2-1115, as last amended by Laws of Utah 2008, Chapters 61 and 382
22
23 Be it enacted by the Legislature of the state of Utah:
24 Section 1. Section 59-2-1115 is amended to read:
25 59-2-1115. Exemption of certain tangible personal property.

26 (1) For purposes of this section:
27 (a) (i) "Acquisition cost" means all costs required to put an item of tangible personal
28 property into service; and
29 (ii) includes:
30 (A) the purchase price for a new or used item;
31 (B) the cost of freight and shipping;
32 (C) the cost of installation, engineering, erection, or assembly; and
33 (D) sales and use taxes.
34 (b) (i) "Item of taxable tangible personal property" does not include an improvement to
35 real property or a part that will become an improvement.
36 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
37 commission may make rules defining the term "item of taxable tangible personal property."
38 (c) (i) "Taxable tangible personal property" means tangible personal property that is
39 subject to taxation under this chapter.
40 (ii) "Taxable tangible personal property" does not include:
41 (A) tangible personal property required by law to be registered with the state before it
42 is used:
43 (I) on a public highway;
44 (II) on a public waterway;
45 (III) on public land; or
46 (IV) in the air;
47 (B) a mobile home as defined in Section 41-1a-102 ; or
48 (C) a manufactured home as defined in Section 41-1a-102 .
49 (2) (a) The taxable tangible personal property of a taxpayer is exempt from taxation if
50 the taxable tangible personal property has a total aggregate fair market value per county of
51 [$3,500] $15,000 or less.
52 (b) [An] In addition to the exemption under Subsection (2)(a), an item of taxable
53 tangible personal property is exempt from taxation if the item of taxable tangible personal
54 property:
55 (i) has an acquisition cost of $1,000 or less;
56 (ii) has reached a percent good of 15% or less according to a personal property

57 schedule:
58 (A) published by the commission pursuant to Section 59-2-107 ; or
59 (B) for an item of personal property that is designated as expensed personal property in
60 accordance with Section 59-2-108 , described in Section 59-2-108 ; and
61 (iii) is in a personal property schedule with a residual value of 15% or less.
62 (3) (a) For calendar years beginning on or after January 1, [2008] 2014, the
63 commission shall increase the dollar amount described in Subsection (2)(a):
64 (i) by a percentage equal to the percentage difference between the consumer price
65 index for the preceding calendar year and the consumer price index for calendar year [2006]
66 2012; and
67 (ii) up to the nearest $100 increment.
68 (b) For purposes of this Subsection(3), the commission shall calculate the consumer
69 price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
70 (c) If the percentage difference under Subsection(3)(a)(i) is zero or a negative
71 percentage, the consumer price index increase for the year is zero.
72 (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
73 commission may make rules to administer this section and provide for uniform
74 implementation.
75 Section 2. Effective date.
76 This bill takes effect on January 1, 2013.