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Show For O Against Q Proposition No, 1 TANGIBLE PERSONAL PROPERTY TAX EXEMPTION Vote cast by the members of the 1984 Legislature on final passage: HOUSE (75 members): Yeas, 66; Nays, 2; Absent or not voting, 7. SENATE (29 members): Yeas, 23; Nays, 0; Absent or not voting, 6. I I Official Ballot Title: Shall Article XIII, Section 14, of the State Constitution be amended to allow the Legislature to exempt motor vehicles, aircraft, and watercraft from the property tax and provide, instead of the property tax, a uniform state fee for vehicles used on public highways, lands or waterways. I I 1 1 1 IMPARTIAL ANALYSIS Proposal The current revenue and taxation article of the Utah Constitution requires that all property, unless exempted, be taxed at a uniform and equal rate. The property taxes on automobiles, boats, and aircraft are determined and collected at the county level. Even though the constitution requires a uniform and equal rate of assessment, the same car could have different tax bills in different counties. This is because of different tax rates (mill levy rates) for each county. The formula for the property tax is: Assessed Value X Mill Levy Rate Amount of Tax The proposed amendment would allow the legislature to exempt from the property tax all types of vehicles, watercraft, and aircraft that must be registered to be used on public highways, waterways or lands. Instead of a tax on these vehicles and craft, the legislature would establish uniform statewide fees or levies. The rate would be the same wherever the property is registered in the state. As with the current property tax, the revenue from the fee would be distributed back to the local taxing districts. Effective Date The amendment, if approved by the voters, would be effective beginning December 31, 1984. However, the amendment only authorizes the legislature to change the current taxes to uniform fees for vehicles, watercraft and aircraft. Until those changes are made by the legislature, no change in the current law would occur. Fiscal Effect There has been no enabling legislation passed by the legislature at this time that would change the property tax on vehicles and craft to a uniform fee. Therefore, if passed, this amendment would have no fiscal impact for the next tax year. Future legislation would be required to implement the changes authorized by this amendment. Arguments for Property taxes on cars, boats, and airplanes are not fair! Our constitution currently requires all property to be taxed according to its market value. For some kinds of property, particularly cars, boats, and airplanes, this requirement means taxes are often too high and unfair. For example, two identical vehicles may be assessed vastly different taxes, depending on where the owner chooses to register the vehicles. Proposition 1 would amend the constitution so a uniform licensing fee could be imposed for motor vehicles, boats, and airplanes in place of the cumbersome property tax. Proposition 1 would encourage compliance with the law! The constitutional requirement that all property must be taxed according to market value means that taxes on motor vehicles and airplanes are comparatively high. In addition, Utah law requires that vehicles and planes used in the state be taxed in Utah. Because of the high taxes, many owners register their vehicles and planes outside of Utah and avoid obeying the law. Proposition 1 will amend the constitution constitu-tion so a reasonable registration fee could be imposed in place of the property tax. As a result, people would not be encouraged to break the law. They would properly register their vehicles in Utah. Actual tax revenues would increase if people complied with the law. The present system is difficult to administer. The present property tax system for cars, planes, and boats is very difficult to administer. Under the current system, there are over 500 different tax rates which may be used to determine the taxes on identical vehicles. A standard registration fee would be much easier to understand and to administer. Proposition 1 has broad support! Those involved in administering the property tax have long felt a change was needed for motor vehicles, boats, and airplanes. The legislature passed Proposition 1 nearly unanimously. In addition, many other states are now using registration fees in place of property taxes. Vote "FOR" Proposition 1! Senator Charles W. Bullen 1624 Sunset Drive Logan, UT 84321 Arguments Against No opposing argument was submitted within the time requirement established by law. COMPLETE TEXT OF PROPOSITION NO. 1 TANGIBLE PERSONAL PROPERTY TAX EXEMPTION RESOLUTION A JOINT RESOLUTION OF THE 45TH LEGISLATURE OF THE STATE OF UTAH PROPOSING TO AMEND ARTICLE XIII OF THE CONSTITUTION OF UTAH TO AUTHORIZE THE LEGISLATURE TO EXEMPT AIRCRAFT, WATERCRAFT, MOTOR VEHICLES, OR OTHER TANGIBLE PERSONAL PROPERTY REQUIRED BY LAW TO BE REGISTERED BEFORE IT IS USED UPON PUBLIC HIGHWAYS AND PUBLIC LANDS FROM TAXATION AS PROPERTY, AND PROVIDE IN LIEU OF SUCH PROPERTY TAX UNIFORM STATEWIDE FEES, OR UNIFORM STATEWIDE RATES OF ASSESSMENT OR LEVY. Be it resolved by the Legislature of the State of Utah, two-thirds of all members elected to each of the two houses voting in favor thereof: Section 1. It is proposed to amend Article XIII of the Constitution of Utah by adding a new section to read: Sec. 14. Aircraft, watercraft, motor vehicles, and other tangible personal property, not otherwise exempt under the laws of the United States or under this Constitution, may be exempted from taxation as property by the Legislature. In the exercise of the discretion granted under this section, however, the legislature may only exempt tangible personal property that is required by law to be registered with the state before it is used on a public highway, on a public waterway, on public land, or in the air. If the legislature exempts tangible personal property from taxation under this section, it shall provide for uniform statewide fees or uniform statewide rates of assessment or levy in lieu of the tax on such property. The value of any tangible personal property exempted from taxation, however, shall remain and be considered as part of the state tax base for the purpose of determining debt limitations as set forth in Article XIV of this Constitution. The proceeds from such a tax or fee are not subject to Sec. 13 of this Article and shall be distributed to the taxing districts in which the exempted property is located in the same proportion as the revenue collected from real property tax is distributed to such districts. Section 2. The lieutenant governor is directed to submit this proposed amendment to the electors of the State of Utah at the next general election in the manner provided by law. Section 3. If adopted by the electors of this state, this amendment shall take effect December 31, 1984. |