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SDAT seeks to restore ability to verify small business personal property reports with 40%‑drop trigger
Summary
SDAT Director Bob Yeager told the Ways and Means Committee HB 294 would restore the department's ability to request documentation when businesses report business personal property below the $20,000 exemption, and he offered an amendment to limit inquiries to cases showing a 40% or greater year‑to‑year decrease or atypical reporting.
Bob Yeager, director of the State Department of Assessments and Taxation, asked the Ways and Means Committee on Jan. 27 to give House Bill 294 a favorable report, saying the measure would restore SDAT's ability to request documentation when businesses report business personal property below the $20,000 exemption threshold.
Yeager said a 2022 change raising the reporting exemption from $2,500 to $20,000 also included language that prohibits the department from seeking documentation to verify self‑reported assessments. SDAT uses annual reports of business personal property — typically furniture, fixtures and equipment — that counties rely on to collect local tax revenue, he said.
"If someone reported $400,000 consistently for several years and then last year reported $100,000 in assets, we would follow up to get documentation on what happened to that other $300,000," Yeager said. He said SDAT currently audits cases showing a 40% or greater decrease in reported property from one year to the next, but the 2022 restriction blocked such follow‑up when the reported amount falls beneath the exemption threshold.
During questioning, Delegate Griffith pressed whether the bill would impose routine burdens on small businesses at a time of weak private‑sector growth. Yeager replied that SDAT would not routinely audit businesses simply because they report under $20,000; instead, the department would limit outreach to significantly atypical decreases. Yeager offered language to codify that approach: authorize SDAT's business personal property division to request additional documentation when the reported amount reflects a decrease of 40% or more over the previous year or is 40% or more below what is historically atypical for that business.
Delegate Polakovich Carr confirmed the bill would not change the existing exemption status for personal property under $20,000, and Yeager reiterated that the legislation restores audit authority rather than creating a new valuation requirement.
The measure is departmental and SDAT requested a favorable report. No formal vote was taken during the hearing.
What happens next: The committee may consider the offered clarifying amendment (the 40% trigger) as it moves the bill through the review process.
