Business property exemption.25LSO-0108, 1.0
SF0048
FISCAL NOTE
FY 2026FY 2027FY 2028NON-ADMINISTRATIVE IMPACTAnticipated Revenue (decrease)SCHOOL FOUNDATION FUND($0)($4,200,000)($4,200,000)AD VALOREM TAX (local taxing entities)($0)($2,500,000)($2,500,000)
Source of revenue (decrease):
This bill provides a property tax exemption on the first $50,000 of fair market
value for business personal property owned in each county.
The estimated decreases in property tax revenues to the School Foundation Program
(SFP) and to other local taxing entities are provided in the above table. The SFP
will experience a revenue decrease from the 43 mills supporting K-12 public
education, which include the statewide 12 mill levy, the school district 25 mill
levy, and the countywide 6 mill levy. For purposes of this analysis, the decrease
in property tax revenues to the SFP is shown as an absolute revenue decrease in
lieu of estimating the school district recapture revenue decrease and school
district entitlement expenditure increase separately.
Assumptions:
The above estimate is based on tax year 2024 business personal property
information obtained from the statewide Computer Assisted Mass Appraisal System
(CAMA). The property tax revenue decrease is computed using the statewide average
mill levy for the 2024 tax year of 68.504 mills. The October 2024 Consensus
Revenue Estimating Group (CREG) forecast projects a zero percent growth rate in
the assessed valuation of non-mineral property for FY 2027 and FY 2028.
This bill does not change the requirement for all companies to annually report
all personal property. County assessors and the Department of Revenue will still
be required to appraise all personal property yearly.
Based on the information above, this bill would decrease total property taxes by
approximately $6.7 million per year in tax years 2026 and 2027 (FY 2027 and FY
2028). Of the estimated total impact, the decreased revenue from the 43 mills
supporting the SFP is approximately $4.2 million per year in tax years 2026 and
2027 (FY 2027 and FY 2028).
This bill may require the Legislature to appropriate additional funds from the
SFP for increased entitlement payments to ensure sufficient funding is available
to offset the reduction in revenue generated by the school district 25 mill levy
and countywide 6 mill levy.
Prepared by: Dean Temte, LSO Phone: 777-7881
(Information provided by Kenneth Guille, Department of Revenue, 777-5235)