A bill intended to fix the AMAX property tax problem passed the Legislature Tuesday, surviving a close vote in the Senate despite concerns that small-business owners would carry the financial burden of the tax shift.
"The lifeblood of this state is small business. That's who you'll hurt with this tax," Sen. Lyle Hillyard, R-Logan, said during Senate floor debate.Sen. George Mantes, D-Tooele, joined in the opposition: "If you pass this bill you're going to send a message loud and clear to the people of Utah that this Legislature loves big business."
Despite their pleas, the bill passed the Senate 16-13 with minor amendments. The House concurred and passed the bill late Tuesday by a vote of 52-20.
Sponsored by Orem Republican Rep. John Valentine, a tax attorney by profession, the legislation will raise homeowners' property taxes statewide an average of less than 1 percent. Meanwhile, property taxes on local businesses will increase an average of 3.2 percent.
For Salt Lake County residents, residential property taxes will increase about $12 a year while auto taxes drop about $4 annually. Uintah County residents, on the other hand, face on the average an $18 increase in property taxes and a $30 increase in car taxes.
The property tax tangle surfaced when the Utah Supreme Court ruled in a case involving AMAX Magnesium Corp.'s property tax. The court said that in order for the tax law to be considered fair, the mining company must get the 20 percent property assessment discount now given to homes and locally assessed businesses.
Hillyard argued that taxes should be levied on large businesses to mitigate the impact of the tax shift on homes and local businesses. "What we're doing without the second step (mitigation) is not right. You're going to come back at another time and regret what you've done," Hillyard said.
Valentine said he had prepared bills that would impose mitigating taxes, among them severance taxes, but there was no support for them.
"If I could get 38 votes on those, I'd run them right now," Valentine told House members late Tuesday.
Valentine said lawmakers had "fought very long and hard to keep these taxes at a level that's acceptable."
Said Valentine: "I'm putting everyone on notice, especially cities, counties, school districts and special service districts. It's up to them not to raise taxes."