Missoula County opposes HB 372: Eliminate business equipment tax, heard in the House Taxation Committee Feb. 18.
HB 372 eliminates all class 8 business equipment from the property tax base. This proposed legislation replaces the lost tax revenue to local governments through an increase to the entitlement share and to the schools through increased block grants. The annual increase in the state entitlement share is calculated using one half of the three-year annual average rate of inflation. This method of calculating the annual increase of the entitlement share will not keep up with the annual increase in eliminated property tax base of class 8 business equipment and will eventually result in raising property taxes to bridge the gap.
The counties will lose a minimum of $26,5443,000 which is to be reimbursed from the state’s general fund through the annual entitlement share payments. The state payment is intended to eliminate the shift from business taxes to class 4 residential taxes however, over time that shift will reappear.
HB 372 eliminates $161.4 million in taxable value, in the first full year this legislation is in effect. The state will lose $16,087,100 in class 8 tax revenue and will have to pay out $72,333,843 to reimburse TIF districts, county and city governments and local schools from the state general fund. The combined loss in revenue and increased expense results in a $87,472,843 hit to the state’s general fund.
Sent Feb. 19:
ReplyDeleteRepresentatives Thane and Marler,
Missoula County opposes HB 372: Eliminate business equipment tax, heard in the House Taxation Committee Feb. 18.
HB 372 eliminates all class 8 business equipment from the property tax base. This proposed legislation replaces the lost tax revenue to local governments through an increase to the entitlement share and to the schools through increased block grants. The annual increase in the state entitlement share is calculated using one half of the three-year annual average rate of inflation. This method of calculating the annual increase of the entitlement share will not keep up with the annual increase in eliminated property tax base of class 8 business equipment and will eventually result in raising property taxes to bridge the gap.
The counties will lose a minimum of $26,5443,000 which is to be reimbursed from the state’s general fund through the annual entitlement share payments. The state payment is intended to eliminate the shift from business taxes to class 4 residential taxes however, over time that shift will reappear.
HB 372 eliminates $161.4 million in taxable value, in the first full year this legislation is in effect. The state will lose $16,087,100 in class 8 tax revenue and will have to pay out $72,333,843 to reimburse TIF districts, county and city governments and local schools from the state general fund. The combined loss in revenue and increased expense results in a $87,472,843 hit to the state’s general fund.
Please oppose HB 372.