Property-tax shift clears House panel

A bill that would shift $87 million from business personal property taxes to individual and business real property taxes passed a House committee Wednesday.

HB338 would exempt from taxes any business personal property valued at less than $500.

Under current law, all of an individual's personal property — furniture, paintings, etc. — is exempt.

Business owners complain that it often costs a lot more money to keep track of their small personal property than they pay each year in taxes.

So, Rep. John Dougall, R-Draper, wants to change the Utah Constitution through HJR1 to allow the business personal property exemption and to then pass a law to implement the exemption (HB338).

Because of the property tax's Truth in Taxation law, when one segment of the property tax base is removed, the tax rates automatically go up so the taxing entity still gets the same total property tax take.

Accordingly, if you exempt $87 million statewide in the personal property of businesses, other property tax payers pay more.

And while $87 million sounds like a lot, because the real property in the state is valued at hundreds of billions of dollars, it doesn't amount to much of an increase.

Utah County Commissioner Steve White, who testified in favor of HB338, told the House Revenue and Taxation Committee that on a $200,000 house the shift would be less than $2 a month.

And the constitutional and statute changes would solve big headaches not only for local businesses but for county assessors, too, said White.

HB338 would exempt from taxation business personal property valued at less than $500. While those small items make up less than 2 percent of a taxing agency's revenues, they are more than half of all the business property on the tax rolls, said White.

Rep. Craig Frank, R-Pleasant Grove, said in his business each year he spends more money keeping track of small items and filing his business property tax than the tax itself costs him. Other small-business men are in the same situation, he added.

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