Revenue: $75,000 business personal-property exemption makes most small reporters’ tax bills zero

Ken Gil, Property Tax Division, Department of Revenue, briefed the committee on the recently enacted $75,000 fair-market-value exemption for business personal property and its near-term fiscal effects.

Gil cautioned the committee that the figures in committee materials were about a month old and that counties were still finalizing some exemptions. He presented the committee with county-by-county and industry-level breakdowns and said the local tax-dollar impact of the exemption was roughly $5.5 million based on the available data. "I will caution on these numbers. These numbers are a month old," Gil told the committee.

Gil also explained the statute’s operational detail: the exemption applied on a per-company-per-county basis (one company per county could receive the $75,000 exemption) and, after proration across reporting districts, many small reporters’ reported personal-property totals fell below the threshold. "About 70% of the local assessed business personal property accounts now have a tax bill of zero," Gil said, describing the immediate local effect.

Committee members asked for further analysis to separate rises in assessed totals attributable to new commercial construction or new businesses versus valuation increases on continuing properties. Gil said an apples-to-apples comparison requires matching identical property rolls year-to-year, which Revenue staff can compile and provide.

The committee asked Revenue to update the figures and to model how recent law changes (for example, Senate File 49’s depreciation-scale changes and trending freeze) will affect personal-property totals in future years. Revenue staff agreed to provide updated abstracts and analysis to the committee.