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Committee backs amended plan to return construction sales tax to counties for large animal facilities
Summary
An amended version of SB 2177 that directs sales-and-use-tax paid on construction materials for new, large animal agricultural facilities back to affected counties and townships was approved by the committee; the amendment raises the minimum investment to $500,000 and adds documentation and an expiration clause.
A Senate Finance and Taxation committee voted to advance an amended Senate Bill 2,177 that would transfer sales-and-use-tax paid on materials for qualifying new animal agricultural facilities back to the county and, on request, to townships that host the facility, to support local infrastructure needs.
Senator Rummel presented the amendment and said its intent is to target large, new construction projects to help counties cover infrastructure costs such as approaches or roadwork. "We want to make sure that this is for the new construction ... This was meant for those larger animal, agricultural facilities that are being built," Rummel said. The amendment increases the minimum qualifying investment from $150,000 in the original draft to $500,000.
Under the amendment, facility owners, facility operators or the contractor may submit documentation of sales-and-use-tax paid on materials and new equipment; the tax department would collect that information annually and transfer the reported amount into a dedicated fund to be distributed to the county (and to organized townships that request a portion) where the facility is located. Committee discussion clarified that transfer requests would be processed once per year and that March 31 is the annual submission deadline included in the amendment.
Senator Wallen said the transfers would provide local counties with at least a modest, guaranteed minimum: "the minimum that'll be going back, if it's requested, is $25,000 because that's 5% of $500,000," referencing the percent-based calculation discussed in committee. Senators discussed that most of these large facilities cost millions to build and that counties and facility owners are likely to be aware of the program and to cooperate in documentation and submission.
The amendment also includes a four-year sunset provision to ensure legislative review. The committee approved the amendment and then voted to recommend a due pass on SB 2,177 as amended. Senator Romo agreed to carry the bill to the floor.
Committee members emphasized that qualification would require a minimum $500,000 investment in new construction or equipment, that documentation must be submitted to the State Tax Department, and that failure of an owner or contractor to apply would mean no transfer to the county.
