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|
SPONSOR: |
|
DATE TYPED: |
|
HB |
324 |
||
|
SHORT TITLE: |
Tangible Personal Property Tax Exemption |
SB |
|
||||
|
|
ANALYST: |
Smith |
|||||
REVENUE
|
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
|
FY03 |
FY04 |
|
|
|
|
|
Positive |
|
Recurring |
Owners
of Personal
Property |
|
|
Negative |
|
Recurring |
Owners
of Real
Property |
|
|
NFI |
|
|
State
and Local Funds |
|
|
|
|
|
|
(Parenthesis ( ) Indicate Revenue Decreases)
Responses
Received From
Taxation
and Revenue Department
SUMMARY
Synopsis
of Bill
House Bill 324 exempts “other tangible personal property used for
business purposes that has been deducted for federal tax purposes by the owner”
from the property tax.
FISCAL IMPLICATIONS
Because of yield
control, the effect of this bill is to shift taxes from businesses to
households and businesses that are heavily invested in real property and
personal property that will still be subject to tax. TRD notes that as a
general rule, the yield control statutes have the effect that, when the property
tax base is reduced by a new exemption, operating mill levies are adjusted
upward to offset the impact on local government revenues. However, under some circumstances, the limits
on total operating levies will prevent the upward adjustment, so the new
exemption can lead to lower operating revenue.
Essentially two conditions must be met for operating revenue losses to
occur as a result of the type of base reduction caused by the proposed bill.
First, the entity must have imposed the maximum rate allowed under existing
statute. Secondly, the actual (i.e., ‘yield controlled”) rate must equal the
imposed rate. In cases where the entity has imposed the maximum rate but the
rate has been reduced via the yield control mechanism, the loss of base will be
compensated for via operating rate increases. In cases where the actual and
imposed rates are at the maximum, however, rate adjustments will not compensate
for losses in tax base. Debt rates, including the one employed for state debt
purposes, will essentially always adjust in a way that compensates for base
reductions.
OTHER SUBSTANTIVE ISSUES
TRD has provided the following table showing the
county level impacts.
|
Illustration: Effects
of Eliminating Depreciable Personal Property Taxation by County |
||||||
|
Column: |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
|
County |
Depreciable Personal
Property |
% of Total |
Total Net Taxable
Value** |
Depreciable Personal
Property Percent of Total |
Weighted Average Non
Residential Rate (Mills) |
Approximate Revenues --
|
|
Bernalillo |
396,638,917 |
39.1 |
9,284,129,807 |
4.27 |
39.6 |
15,712,485 |
|
Catron |
200,380 |
0.0 |
66,595,079 |
0.30 |
15.4 |
3,084 |
|
Chaves |
24,448,330 |
2.4 |
663,854,170 |
3.68 |
26.0 |
634,773 |
|
|
13,885,082 |
1.4 |
194,521,689 |
7.14 |
28.4 |
394,200 |
|
Colfax |
11,449,477 |
1.1 |
245,549,748 |
4.66 |
25.2 |
288,377 |
|
Curry |
22,147,928 |
2.2 |
404,520,396 |
5.48 |
23.7 |
525,041 |
|
DeBaca |
591,402 |
0.1 |
33,376,964 |
1.77 |
25.8 |
15,243 |
|
Dona Ana |
68,884,699 |
6.8 |
1,984,387,702 |
3.47 |
30.9 |
2,131,154 |
|
Eddy |
46,772,267 |
4.6 |
1,737,463,068 |
2.69 |
17.7 |
828,412 |
|
Grant |
9,483,227 |
0.9 |
476,190,212 |
1.99 |
15.0 |
142,715 |
|
Guadalupe |
1,880,345 |
0.2 |
84,671,621 |
2.22 |
31.3 |
58,850 |
|
Harding |
3,691,323 |
0.4 |
41,884,792 |
8.81 |
16.8 |
61,910 |
|
|
1,845,801 |
0.2 |
93,534,417 |
1.97 |
22.6 |
41,680 |
|
Lea |
52,169,328 |
5.1 |
1,610,522,658 |
3.24 |
24.7 |
1,286,982 |
|
|
8,814,167 |
0.9 |
545,555,677 |
1.62 |
27.7 |
244,116 |
|
|
8,116,703 |
0.8 |
510,919,259 |
1.59 |
20.5 |
166,149 |
|
Luna |
13,960,542 |
1.4 |
259,915,140 |
5.37 |
20.8 |
290,969 |
|
McKinley |
29,017,820 |
2.9 |
580,702,177 |
5.00 |
32.4 |
939,110 |
|
Mora |
587,656 |
0.1 |
61,946,552 |
0.95 |
23.8 |
13,968 |
|
Otero |
14,558,772 |
1.4 |
586,678,227 |
2.48 |
30.2 |
439,000 |
|
Quay |
3,970,042 |
0.4 |
108,656,349 |
3.65 |
26.6 |
105,617 |
|
|
5,553,406 |
0.5 |
1,254,383,846 |
0.44 |
23.3 |
129,439 |
|
|
11,006,558 |
1.1 |
204,410,623 |
5.38 |
19.0 |
208,761 |
|
|
104,953,914 |
10.3 |
3,106,092,088 |
3.38 |
23.7 |
2,483,573 |
|
San Miguel |
7,040,426 |
0.7 |
362,502,900 |
1.94 |
28.0 |
197,401 |
|
Sandoval |
31,837,092 |
3.1 |
1,433,443,667 |
2.22 |
26.9 |
856,549 |
|
|
74,608,982 |
7.3 |
3,789,882,990 |
1.97 |
23.3 |
1,739,459 |
|
Sierra |
3,582,132 |
0.4 |
184,856,384 |
1.94 |
23.9 |
85,544 |
|
Socorro |
3,124,981 |
0.3 |
122,164,319 |
2.56 |
32.0 |
99,902 |
|
|
8,027,814 |
0.8 |
676,500,978 |
1.19 |
19.3 |
154,900 |
|
|
3,528,047 |
0.3 |
216,174,461 |
1.63 |
22.3 |
78,751 |
|
|
16,283,433 |
1.6 |
120,074,290 |
13.56 |
22.0 |
357,794 |
|
|
12,497,155 |
1.2 |
704,391,594 |
1.77 |
30.0 |
374,460 |
SS/sb