SB 623

Under current law, beginning with the property tax assessments as of January

1, 2018, machinery, tools, and patterns, not including those items used in

manufacturing, are exempt from the personal property tax. However, beginning in

2019, the state pays each taxing jurisdiction an amount equal to the property taxes

levied on those items of personal property for the property tax assessments as of

January 1, 2017.

Under the bill, beginning with the property tax assessments as of January 1,

2022, no items of personal property will be subject to the property tax. Beginning in

2023, the state will pay each taxing jurisdiction an additional amount equal to the

property taxes levied on the items made exempt under the bill for the property tax

assessments as of January 1, 2021. Beginning in 2024, each taxing jurisdiction will

receive a payment to compensate it for its loss in personal property revenue equal

to the payment it received in the previous year, increased by the annual percentage

change in the consumer price index.

Under current law, generally, public utilities, including railroad companies, are

subject to a license fee imposed by the state instead of being subject to local property

taxes. This bill creates a personal property tax exemption for railroad companies in

order to comply with the requirements of the federal Railroad Revitalization and

Regulatory Reform Act.

Finally, the bill makes a number of technical changes related to the repeal of

the personal property tax, such as providing a process whereby manufacturing

establishments located in this state that do not own real property in this state may

continue to claim the manufacturing income tax credit.

Because this bill relates to an exemption from state or local taxes, it may be

referred to the Joint Survey Committee on Tax Exemptions for a report to be printed

as an appendix to the bill.