Committee OKs bill on taxation exemption

A House committee approved a bill Tuesday that will allow Utah businesses to exempt small amounts of personal property from taxation.

Last November, Utahns amended the state Constitution to allow the personal property tax exemption.

Since the state doesn't levy a property tax, state funds will not be affected. However, local governments and school districts do levy property taxes, and Salt Lake County Assessor Lee Gardner said while the effects are not known now, the loss of revenue could be "significant."

Still, Rep. John Dougall, R-Highland, and supporters of his HB111 said it is only fair to exempt small amounts of a business's personal property. It often costs a business more money to track and pay the property taxes on items worth less than $100 than they pay in taxes.

The bill also takes out of the certified property tax rate special micro-chip manufacturers. The firms, like IM Flash Technologies, will still pay normal personal property taxes.

But because micro-chip producers have to spend so much money on manufacturing machines — as much as $1 billion — and because those machines can become outdated in a half dozen years, local taxing entities could push the firm's huge personal property tax bills on to homeowners and other businesses as the micro-chip's personal property taxes drop.