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Amendment B: property tax exemptions

Getty Images: Salt lake City at sunrise, looking south toward the state Capitol.

SALT LAKE CITY — Voters will decide in November whether to give property tax exemptions to private property that the Utah state government or even city or county governments lease for official business.

Proposed Constitutional Amendment B is one of seven voter referendums on the Utah ballot in 2018. Under current law, property owned by the state or local government can be considered tax exempt, but that’s not true of all space used by the state and local governments. On occasion, governments lease space from private owners, and that property is subject to tax.

Property tax impact on budgets

The legislature’s fiscal analyst estimates voter approval of Constitutional Amendment B would save the state government around $1.8 million per year. However, it’s unclear how much local governments pay for leasing privately-owned space, and the analyst notes local governments would also wind up losing that tax revenue, which could result in property tax increases for everyone else.

Arguments in favor

Sen. Dan Hemmert, R-Orem, and Rep. Adam Robertson, R-Provo, wrote the argument in favor of passing Amendment B. They write, “It does not make sense to use taxes to pay taxes.”

They argue Amendment B would be “revenue neutral,” neither resulting in an increase or a decrease in revenue, but instead simplifying taxes, while making government more efficient and transparent.

Arguments against

Senate Minority Leader Gene Davis, D-Salt Lake City, and Rep. Sandra Hollins, D-Salt Lake City, wrote the argument against approving Amendment B.

“If you lease land to the state, Amendment B will save you money,” they write. “If you are like the rest of us who do not, Amendment B will raise your taxes.”

Davis and Hollins argue that the number of people who would benefit from this property tax exemption is relatively small, while schools, cities and counties would be, in their view, forced to raise taxes on other residents to make up for the lost revenue.

Hemmert and Robertson counter that claim, arguing that it is the government tenant, not the property owner, who pays the tax and would benefit from the exemption.

A sense of Déjà Vu

Davis and Hollins point out Utah voters rejected a very similar proposal just a couple of years ago, so KSL did some fact-checking.

In 2016, voters defeated the Utah Property Tax Exemptions Amendment, known then as Amendment C, with a margin of 49.7% against the measure to 37.0% in favor. Not all voters filled in the information for Amendment C on their ballot, which is why that percentage does not add up to 100.

What happens in 2018?

If voters approve Amendment B, it would take effect Jan. 1, 2019.