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7 LONG TITLE
8 General Description:
9 This bill modifies the Property Tax Act.
10 Highlighted Provisions:
11 This bill:
12 ▸ modifies the qualifications for tangible personal property tax to be exempt from
13 property tax; and
14 ▸ excludes the revenue generated from the increase in the amount of the exemption
15 that is based on aggregate taxable value in the county from the certified tax rate
16 calculation.
17 Money Appropriated in this Bill:
18 None
19 Other Special Clauses:
20 This bill provides a special effective date.
21 Utah Code Sections Affected:
22 AMENDS:
23 59-2-924, as last amended by Laws of Utah 2020, Chapters 305 and 354
24 59-2-1115, as last amended by Laws of Utah 2020, Chapters 38 and 42
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26 Be it enacted by the Legislature of the state of Utah:
27 Section 1. Section 59-2-924 is amended to read:
28 59-2-924. Definitions -- Report of valuation of property to county auditor and
29 commission -- Transmittal by auditor to governing bodies -- Calculation of certified tax
30 rate -- Rulemaking authority -- Adoption of tentative budget -- Notice provided by the
31 commission.
32 (1) As used in this section:
33 (a) (i) "Ad valorem property tax revenue" means revenue collected in accordance with
34 this chapter.
35 (ii) "Ad valorem property tax revenue" does not include:
36 (A) interest;
37 (B) penalties;
38 (C) collections from redemptions; or
39 (D) revenue received by a taxing entity from personal property that is semiconductor
40 manufacturing equipment assessed by a county assessor in accordance with Part 3, County
41 Assessment.
42 (b) "Adjusted tax increment" means the same as that term is defined in Section
43 17C-1-102.
44 (c) (i) "Aggregate taxable value of all property taxed" means:
45 (A) the aggregate taxable value of all real property a county assessor assesses in
46 accordance with Part 3, County Assessment, for the current year;
47 (B) the aggregate taxable value of all real and personal property the commission
48 assesses in accordance with Part 2, Assessment of Property, for the current year; and
49 (C) the aggregate year end taxable value of all personal property a county assessor
50 assesses in accordance with Part 3, County Assessment, contained on the prior year's tax rolls
51 of the taxing entity.
52 (ii) "Aggregate taxable value of all property taxed" does not include the aggregate year
53 end taxable value of personal property that is:
54 (A) semiconductor manufacturing equipment assessed by a county assessor in
55 accordance with Part 3, County Assessment; and
56 (B) contained on the prior year's tax rolls of the taxing entity.
57 (d) "Base taxable value" means:
58 (i) for an authority created under Section 11-58-201, the same as that term is defined in
59 Section 11-58-102;
60 (ii) for an agency created under Section 17C-1-201.5, the same as that term is defined
61 in Section 17C-1-102;
62 (iii) for an authority created under Section 63H-1-201, the same as that term is defined
63 in Section 63H-1-102; or
64 (iv) for a host local government, the same as that term is defined in Section 63N-2-502.
65 (e) "Centrally assessed benchmark value" means an amount equal to the highest year
66 end taxable value of real and personal property the commission assesses in accordance with
67 Part 2, Assessment of Property, for a previous calendar year that begins on or after January 1,
68 2015, adjusted for taxable value attributable to:
69 (i) an annexation to a taxing entity; or
70 (ii) an incorrect allocation of taxable value of real or personal property the commission
71 assesses in accordance with Part 2, Assessment of Property.
72 (f) (i) "Centrally assessed new growth" means the greater of:
73 (A) zero; or
74 (B) the amount calculated by subtracting the centrally assessed benchmark value
75 adjusted for prior year end incremental value from the taxable value of real and personal
76 property the commission assesses in accordance with Part 2, Assessment of Property, for the
77 current year, adjusted for current year incremental value.
78 (ii) "Centrally assessed new growth" does not include a change in value as a result of a
79 change in the method of apportioning the value prescribed by the Legislature, a court, or the
80 commission in an administrative rule or administrative order.
81 (g) "Certified tax rate" means a tax rate that will provide the same ad valorem property
82 tax revenue for a taxing entity as was budgeted by that taxing entity for the prior year.
83 (h) "Eligible new growth" means the greater of:
84 (i) zero; or
85 (ii) the sum of:
86 (A) locally assessed new growth;
87 (B) centrally assessed new growth; and
88 (C) project area new growth or hotel property new growth.
89 (i) "Host local government" means the same as that term is defined in Section
90 63N-2-502.
91 (j) "Hotel property" means the same as that term is defined in Section 63N-2-502.
92 (k) "Hotel property new growth" means an amount equal to the incremental value that
93 is no longer provided to a host local government as incremental property tax revenue.
94 (l) "Incremental property tax revenue" means the same as that term is defined in
95 Section 63N-2-502.
96 (m) "Incremental value" means:
97 (i) for an authority created under Section 11-58-201, the amount calculated by
98 multiplying:
99 (A) the difference between the taxable value and the base taxable value of the property
100 that is located within a project area and on which property tax differential is collected; and
101 (B) the number that represents the percentage of the property tax differential that is
102 paid to the authority;
103 (ii) for an agency created under Section 17C-1-201.5, the amount calculated by
104 multiplying:
105 (A) the difference between the taxable value and the base taxable value of the property
106 located within a project area and on which tax increment is collected; and
107 (B) the number that represents the adjusted tax increment from that project area that is
108 paid to the agency;
109 (iii) for an authority created under Section 63H-1-201, the amount calculated by
110 multiplying:
111 (A) the difference between the taxable value and the base taxable value of the property
112 located within a project area and on which property tax allocation is collected; and
113 (B) the number that represents the percentage of the property tax allocation from that
114 project area that is paid to the authority; or
115 (iv) for a host local government, an amount calculated by multiplying:
116 (A) the difference between the taxable value and the base taxable value of the hotel
117 property on which incremental property tax revenue is collected; and
118 (B) the number that represents the percentage of the incremental property tax revenue
119 from that hotel property that is paid to the host local government.
120 (n) (i) "Locally assessed new growth" means the greater of:
121 (A) zero; or
122 (B) the amount calculated by subtracting the year end taxable value of real property the
123 county assessor assesses in accordance with Part 3, County Assessment, for the previous year,
124 adjusted for prior year end incremental value from the taxable value of real property the county
125 assessor assesses in accordance with Part 3, County Assessment, for the current year, adjusted
126 for current year incremental value.
127 (ii) "Locally assessed new growth" does not include a change in:
128 (A) value as a result of factoring in accordance with Section 59-2-704, reappraisal, or
129 another adjustment;
130 (B) assessed value based on whether a property is allowed a residential exemption for a
131 primary residence under Section 59-2-103;
132 (C) assessed value based on whether a property is assessed under Part 5, Farmland
133 Assessment Act; or
134 (D) assessed value based on whether a property is assessed under Part 17, Urban
135 Farming Assessment Act.
136 (o) "Project area" means:
137 (i) for an authority created under Section 11-58-201, the same as that term is defined in
138 Section 11-58-102;
139 (ii) for an agency created under Section 17C-1-201.5, the same as that term is defined
140 in Section 17C-1-102; or
141 (iii) for an authority created under Section 63H-1-201, the same as that term is defined
142 in Section 63H-1-102.
143 (p) "Project area new growth" means:
144 (i) for an authority created under Section 11-58-201, an amount equal to the
145 incremental value that is no longer provided to an authority as property tax differential;
146 (ii) for an agency created under Section 17C-1-201.5, an amount equal to the
147 incremental value that is no longer provided to an agency as tax increment; or
148 (iii) for an authority created under Section 63H-1-201, an amount equal to the
149 incremental value that is no longer provided to an authority as property tax allocation.
150 (q) "Property tax allocation" means the same as that term is defined in Section
151 63H-1-102.
152 (r) "Property tax differential" means the same as that term is defined in Section
153 11-58-102.
154 (s) "Qualifying exempt revenue" means revenue received:
155 (i) for the previous calendar year;
156 (ii) by a taxing entity;
157 (iii) from tangible personal property contained on the prior year's tax rolls that is
158 exempt from property tax under Subsection 59-2-1115(2)(b) for a calendar year beginning on
159 January 1, 2022; and
160 (iv) on the aggregate 2021 year end taxable value of the tangible personal property that
161 exceeds $15,300.
162 [
163 (2) Before June 1 of each year, the county assessor of each county shall deliver to the
164 county auditor and the commission the following statements:
165 (a) a statement containing the aggregate valuation of all taxable real property a county
166 assessor assesses in accordance with Part 3, County Assessment, for each taxing entity; and
167 (b) a statement containing the taxable value of all personal property a county assessor
168 assesses in accordance with Part 3, County Assessment, from the prior year end values.
169 (3) The county auditor shall, on or before June 8, transmit to the governing body of
170 each taxing entity:
171 (a) the statements described in Subsections (2)(a) and (b);
172 (b) an estimate of the revenue from personal property;
173 (c) the certified tax rate; and
174 (d) all forms necessary to submit a tax levy request.
175 (4) (a) Except as otherwise provided in this section, the certified tax rate shall be
176 calculated by dividing the ad valorem property tax revenue that a taxing entity budgeted for the
177 prior year minus the qualifying exempt revenue by the amount calculated under Subsection
178 (4)(b).
179 (b) For purposes of Subsection (4)(a), the legislative body of a taxing entity shall
180 calculate an amount as follows:
181 (i) calculate for the taxing entity the difference between:
182 (A) the aggregate taxable value of all property taxed; and
183 (B) any adjustments for current year incremental value;
184 (ii) after making the calculation required by Subsection (4)(b)(i), calculate an amount
185 determined by increasing or decreasing the amount calculated under Subsection (4)(b)(i) by the
186 average of the percentage net change in the value of taxable property for the equalization
187 period for the three calendar years immediately preceding the current calendar year;
188 (iii) after making the calculation required by Subsection (4)(b)(ii), calculate the product
189 of:
190 (A) the amount calculated under Subsection (4)(b)(ii); and
191 (B) the percentage of property taxes collected for the five calendar years immediately
192 preceding the current calendar year; and
193 (iv) after making the calculation required by Subsection (4)(b)(iii), calculate an amount
194 determined by:
195 (A) multiplying the percentage of property taxes collected for the five calendar years
196 immediately preceding the current calendar year by eligible new growth; and
197 (B) subtracting the amount calculated under Subsection (4)(b)(iv)(A) from the amount
198 calculated under Subsection (4)(b)(iii).
199 (5) A certified tax rate for a taxing entity described in this Subsection (5) shall be
200 calculated as follows:
201 (a) except as provided in Subsection (5)(b), for a new taxing entity, the certified tax
202 rate is zero;
203 (b) for a municipality incorporated on or after July 1, 1996, the certified tax rate is:
204 (i) in a county of the first, second, or third class, the levy imposed for municipal-type
205 services under Sections 17-34-1 and 17-36-9; and
206 (ii) in a county of the fourth, fifth, or sixth class, the levy imposed for general county
207 purposes and such other levies imposed solely for the municipal-type services identified in
208 Section 17-34-1 and Subsection 17-36-3(23); and
209 (c) for debt service voted on by the public, the certified tax rate is the actual levy
210 imposed by that section, except that a certified tax rate for the following levies shall be
211 calculated in accordance with Section 59-2-913 and this section:
212 (i) a school levy provided for under Section 53F-8-301, 53F-8-302, or 53F-8-303; and
213 (ii) a levy to pay for the costs of state legislative mandates or judicial or administrative
214 orders under Section 59-2-1602.
215 (6) (a) A judgment levy imposed under Section 59-2-1328 or 59-2-1330 may be
216 imposed at a rate that is sufficient to generate only the revenue required to satisfy one or more
217 eligible judgments.
218 (b) The ad valorem property tax revenue generated by a judgment levy described in
219 Subsection (6)(a) may not be considered in establishing a taxing entity's aggregate certified tax
220 rate.
221 (7) (a) For the purpose of calculating the certified tax rate, the county auditor shall use:
222 (i) the taxable value of real property:
223 (A) the county assessor assesses in accordance with Part 3, County Assessment; and
224 (B) contained on the assessment roll;
225 (ii) the year end taxable value of personal property:
226 (A) a county assessor assesses in accordance with Part 3, County Assessment; and
227 (B) contained on the prior year's assessment roll; and
228 (iii) the taxable value of real and personal property the commission assesses in
229 accordance with Part 2, Assessment of Property.
230 (b) For purposes of Subsection (7)(a), taxable value does not include eligible new
231 growth.
232 (8) (a) On or before June 30, a taxing entity shall annually adopt a tentative budget.
233 (b) If a taxing entity intends to exceed the certified tax rate, the taxing entity shall
234 notify the county auditor of:
235 (i) the taxing entity's intent to exceed the certified tax rate; and
236 (ii) the amount by which the taxing entity proposes to exceed the certified tax rate.
237 (c) The county auditor shall notify property owners of any intent to levy a tax rate that
238 exceeds the certified tax rate in accordance with Sections 59-2-919 and 59-2-919.1.
239 (9) (a) Subject to Subsection (9)(d), the commission shall provide notice, through
240 electronic means on or before July 31, to a taxing entity and the Revenue and Taxation Interim
241 Committee if:
242 (i) the amount calculated under Subsection (9)(b) is 10% or more of the year end
243 taxable value of the real and personal property the commission assesses in accordance with
244 Part 2, Assessment of Property, for the previous year, adjusted for prior year end incremental
245 value; and
246 (ii) the amount calculated under Subsection (9)(c) is 50% or more of the total year end
247 taxable value of the real and personal property of a taxpayer the commission assesses in
248 accordance with Part 2, Assessment of Property, for the previous year.
249 (b) For purposes of Subsection (9)(a)(i), the commission shall calculate an amount by
250 subtracting the taxable value of real and personal property the commission assesses in
251 accordance with Part 2, Assessment of Property, for the current year, adjusted for current year
252 incremental value, from the year end taxable value of the real and personal property the
253 commission assesses in accordance with Part 2, Assessment of Property, for the previous year,
254 adjusted for prior year end incremental value.
255 (c) For purposes of Subsection (9)(a)(ii), the commission shall calculate an amount by
256 subtracting the total taxable value of real and personal property of a taxpayer the commission
257 assesses in accordance with Part 2, Assessment of Property, for the current year, from the total
258 year end taxable value of the real and personal property of a taxpayer the commission assesses
259 in accordance with Part 2, Assessment of Property, for the previous year.
260 (d) The notification under Subsection (9)(a) shall include a list of taxpayers that meet
261 the requirement under Subsection (9)(a)(ii).
262 Section 2. Section 59-2-1115 is amended to read:
263 59-2-1115. Exemption of certain tangible personal property.
264 (1) As used in this section:
265 (a) (i) "Item of taxable tangible personal property" does not include an improvement to
266 real property or a part that will become an improvement.
267 (ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
268 commission may make rules defining the term "item of taxable tangible personal property."
269 (b) (i) "Taxable tangible personal property" means tangible personal property that is
270 subject to taxation under this chapter.
271 (ii) "Taxable tangible personal property" does not include:
272 (A) tangible personal property required by law to be registered with the state before it
273 is used on a public highway, public waterway, or public land or in the air;
274 (B) a mobile home as defined in Section 41-1a-102; or
275 (C) a manufactured home as defined in Section 41-1a-102.
276 (2) (a) In accordance with Utah Constitution, Article XIII, Section 3, Subsection
277 (2)(a)(vi), which provides that the Legislature may by statute exempt tangible personal property
278 that, if subject to property tax, would generate an inconsequential amount of revenue, the
279 Legislature exempts the tangible personal property described in this Subsection (2).
280 (b) The taxable tangible personal property of a taxpayer is exempt from taxation if the
281 taxable tangible personal property has a total aggregate taxable value per county of [
282 $25,000 or less.
283 [
284
285
286 [
287 [
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289 [
290 (c) For an item of taxable tangible personal property that is not exempt under
291 Subsection [
292 [
293
294 [
295 (i) the item is owned by a business and is not critical to the actual business operation of
296 the business; and
297 (ii) the acquisition cost of the item is[
298 [
299 [
300 (3) (a) For a calendar year beginning on or after January 1, [
301 commission shall increase the dollar amount described in Subsection (2)[
302 (i) by a percentage equal to the percentage difference between the consumer price
303 index for the preceding calendar year and the consumer price index for calendar year [
304 2021; and
305 (ii) up to the nearest $100 increment.
306 (b) For purposes of this Subsection (3), the commission shall calculate the consumer
307 price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
308 (c) If the percentage difference under Subsection (3)(a)(i) is zero or a negative
309 percentage, the consumer price index increase for the year is zero.
310 (4) (a) For the first calendar year in which a taxpayer qualifies for an exemption
311 described in Subsection (2)[
312 statement described in Section 59-2-306.
313 (b) Notwithstanding Section 59-2-306 and subject to Subsection (5), for a calendar
314 year in which a taxpayer qualifies for an exemption described in Subsection (2)[
315 calendar year described in Subsection (4)(a), a signed statement described in Section 59-2-306
316 with respect to the taxable tangible personal property that is exempt under Subsection
317 (2)[
318 qualifies for the exemption under Subsection (2)[
319 (c) If a taxpayer qualifies for an exemption described in Subsection (2)[
320 consecutive years and files a signed statement for each of those years in accordance with
321 Section 59-2-306 and Subsection (4)(b), a county assessor may not require the taxpayer to file a
322 signed statement for each continuing consecutive year for which the taxpayer qualifies for the
323 exemption.
324 (d) If a taxpayer qualifies for an exemption described in Subsection [
325 for an item of tangible taxable personal property, a county assessor may not require the
326 taxpayer to include the item on a signed statement described in Section 59-2-306.
327 (5) A signed statement with respect to qualifying exempt primary residential rental
328 personal property is as provided in Section 59-2-103.5.
329 (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
330 commission may make rules to administer this section and provide for uniform
331 implementation.
332 Section 3. Effective date.
333 This bill takes effect on January 1, 2022.