SB 821

Personal property tax exemption

Machinery, tools, and patterns, not including such items used in

manufacturing, are exempt from the personal property tax under current law and

the state reimburses the taxing jurisdictions where this property is located for the

the loss of property tax revenue. The reimbursement amount is based on the

assessed value of such property in the last year in which the property was taxable.

This bill exempts all other machinery, tools, and patterns from the personal

property tax and reimburses the taxing jurisdictions where this property is located

for the the loss of property tax revenue, based on the 2019 assessed values of such

property. The bill also clarifies that following the termination of a tax incremental

district the amount that would have been paid to the tax incremental district under

current law and under the bill is distributed to the other applicable taxing

jurisdictions.

Sliding scale standard deduction

This bill increases the maximum individual income tax sliding scale standard

deduction (SSSD) by 13.2 percent for each type of income tax filer, increases the

income levels for beginning the deduction phaseout by 11.4 percent, and modifies

each of the phaseout percentages so they are closer together. These changes first

apply to taxable year 2020. The indexing provisions that apply to the current SSSD

continue to apply to the new standard deduction amounts.

Debt reduction

Under current law, the secretary of administration annually calculates the

difference between the amount of tax revenues projected to be deposited in the

general fund during the fiscal year and the amount of tax revenues actually

deposited in the general fund during the fiscal year. If the projected amount is less

than the amount of tax revenues actually deposited in the general fund during the

fiscal year, i.e., there is a surplus, the secretary of administration is required to

transfer from the general fund to the budget stabilization fund 50 percent of the

surplus.

However, current law further provides that if the balance of the budget

stabilization fund on June 30 of the fiscal year is at least equal to five percent of the

estimated expenditures from the general fund during the fiscal year, the secretary

may not make the transfer to the budget stabilization fund.

Under this bill, if the secretary of administration does not make a transfer to

the budget stabilization fund because the balance of the budget stabilization fund on

June 30 of the fiscal year is at least equal to five percent of the estimated

expenditures from the general fund during the fiscal year, 50 percent of the surplus

must be used to reduce the state's general obligation and variable rate debt

supported by general purpose revenue.

The bill further requires that the state's general obligation and variable rate