Utah State Legislature House Bill 67- Primary Residential Exemptions for Personal Property in Qualified Residential Property (59-2-103)

The 45% primary residential exemption is applied to household furnishings, furniture and equipment owned by the owner of a dwelling unit that is used exclusively as the primary residence of a tenant. It is the landlord’s (not the tenant’s) property that receives the residential exemption.

1. Residential Property means property used for residential purpose as a primary residence.
2. Residential Rental Property household furnishing, furniture and equipment qualify for the primary residential exemption under 59-2-103(30)(a) if:
1. It is used exclusively within a dwelling unit that is the primary residence of a tenant.
2. Owned by the owner of the dwelling unit that is the primary residence of a tenant.
3. The exemption does not include property used for transient residential use (59-2-103(32)(b)(ii)).

Utah Code in Title 59 requires the taxation of property for the funding of local government and Utah schools. Property tax is assessed on both real property and personal property. Generally, personal property used in a business is subject to property taxes. Utah law requires business personal property to be reported to the county assessor where the property is located (has situs) on a tax form identified as a Personal Property Signed Statement. Personal Property is taxed based on its taxable value as of January 1 of each year. In order to value personal property, the Utah State Tax Commission provides personal property classification schedules which are used by all county assessors in Utah.

Personal Property is valued using a classification system referred to as “Recommended Personal Property Valuation Schedules”. These schedules identify various types of personal property and provide a “percent good” of acquisition cost for commercial personal property. These valuation schedules provide a factor to be applied to acquisition cost (refer to the Definition of Acquisition Cost below) and acquisition year to determine taxable value. Once taxable value is determined, the local tax rate is applied to calculate the tax due.

Tangible Personal Property Exemption-(Utah Code 59-2-1115 (2)(b)) “The taxable tangible personal property of a taxpayer is exempt from taxation if the taxable tangible personal property has a total aggregate taxable value per county of $28,400 or less.”

Personal Property Filing Deadline-(Utah Code 59-2-306(2)(a)) A signed statement "shall be filed on or before May 15 of the year statement ... is requested by the county assessor."

Late Filing Penalty-(Utah Code 59-2-307) "Each person who fails to file the signed statement required by section 59-2-306 ... shall pay a penalty equal to 10% of the estimated tax due but not less than $25 for each failure to file a signed and complete statement."

Late Filing Penalty – Utah Code Ann. 59-2-307- "The penalty under Subsection (1)(a) ... may not be imposed until 30 days after the postmark date of mailing of a subsequent reminder notice." That subsequent reminder notice will be mailed in a timely manner prior to the filing deadline of May 15, 2024 ... therefore the late filing penalty will be "applied to all accounts that have not filed by May 15, 2024. Upon a showing of reasonable cause, a county may waive or reduce a penalty imposed under subsection (1)(a)"

Acquisition Cost defined (Utah Code 59-2-102 (1)) “Acquisition cost” means the cost required to put an item of tangible personal property into service. Acquisition cost includes:
(i) the purchase price of a new or used items;
(ii) the cost of freight, shipping, loading at origin, unloading at destination, crating, skidding, or any other applicable cost of shipping;
(iii) the cost of installation, engineering, rigging, erection, or assembly, including foundations, piling, utility connections, or similar costs; and
(iv) sales and use taxes.

Non-Capitalized Personal Property (Utah Code 59-2-108) – In the 2023 session, the Utah State Legislature passed S.B. 157 with a retrospective effective date of January 1, 2023. SB157 repealed UCA 59-2-108, which, in effect, deleted Class 28 Non-Capitalized Equipment from the Utah Classification Guide. All assets currently elected in Class 28 will remain for tax year 2023. These assets will be reclassified for tax year 2024.

For 2024, a business with an aggregate taxable value of $28,400 or less may be exempt from personal property tax. This exemption applies to the total value of all Personal Property owned and/or used by the business in Weber County. If you have more than one business location in Weber County under the same business ownership, the exemption is applicable only if the total value of all property owned by such entity is less than $28,400. To qualify for this exemption, you must still file. (Utah Code 59-2-1115 (2)(a)) “The taxable tangible personal property of a taxpayer is exempt from taxation if the taxable tangible personal property has a total aggregate taxable value per county of $28,400 or less.”

Beginning in 2024, if a business files and qualifies for the personal property tax exemption, a county assessor may not require the business to file a business personal property signed statement for each continuing consecutive year for which the taxpayer qualifies for the exemption. Please note: If the total aggregate value of the personal property exceeds $28,400 the business is required to file. The Weber County Assessor’s Office will notify you if your business has filed and qualified for the exemption. Utah Code Ann. 59-2-1115 (4)(b) states, “If a taxpayer qualifies for an exemption … and files a signed statement…, a county assessor may not require the taxpayer to file a signed statement for each continuing consecutive year for which the taxpayer qualifies for the exemption.”

Tangible Personal Property Exemption-(Utah Code 59-2-1115 (1)(b)ann…) “Supply means taxable tangible personal property that is not held for resale in the ordinary course of business. ‘Supply’ includes an office supply, a shipping supply, a maintenance supply, a replacement part, a lubricating oil, a fuel, and items consumed in the course of operating the business. ‘Supply’ does not include furniture, a fixture, machinery, equipment, a computer, a cellular telephone, or a vehicle.”

Property owned and used exclusively by a non-profit religious, charitable, or educational institution may be exempted upon application and approval by the Weber County Board of Equalization. Until the exemption is approved by the board, the entity is deemed taxable.

Property owned by the Federal, State, or local government is exempt by virtue of its ownership. Property leased to an exempt entity is not considered exempt.

Additionally, the following types of tangible property are exempt: livestock, farm machinery and equipment, and inventory held for resale in the normal course of business.

A penalty of $25 or 10% of the estimated tax due, whichever is greater, is assessed when a taxpayer fails to file a statement of personal property on or before May 15, 2024. Property willfully concealed, misrepresented, or moved, in order to escape taxation is subject to a penalty equal to the tax on its value.

Utah Code: 59-2-307- ... Each person that fails to file the signed statement shall pay a penalty equal to 10% of the estimated tax due, but not less than $25 for each failure to file a signed and completed affidavit. Upon a showing of reasonable cause, a county may waive or reduce a penalty imposed.

(Utah Code 59-2-307(2)(b) “... a penalty under Subsection (1)(a) may be imposed on or after May 15 of the year the statement described in Section 59-2-306 is requested by the county assessor.”

Accounts not satisfied by May 15, 2024 will be subject to interest at the rate of 10.00% annually.

In 2023, The Utah Legislature removed Class 28 – Non-Capitalized Personal Property from the Recommended Personal Property Valuation Schedule. If your business had reported assets in Class 28, those assets have been reclassified per the asset description provided.

Any Taxpayer dissatisfied with the taxable value may appeal by filing an application no later than May 15, 2024. Appeal forms may be obtained online or from the Weber County Auditor's office, 2380 Wash. Blvd. STE 320 Ogden, Utah 84401. Appeal must be received no later than May 15, 2024.

In order to ensure compliance with the self-assessing program, random and/or referred audits may be performed by the assessor. The audit section of the personal property division performs detailed reviews of financial records and on-site inspections of taxpayers' facilities and compares those results to the statements submitted by the taxpayer. Escaped property, when discovered, may be assessed as far back as five years from the date of discovery. Property willfully concealed, misrepresented, or moved, in order to escape taxation is subject to a penalty equal to the tax on its value.

Property:

"Property" means property which is subject to assessment and taxation according to its value, but does not include moneys, credits, bonds, stocks, representative property, franchises, goodwill, copyrights, patents, or other intangibles.

Every class of property defined as property which is the subject of ownership and not included within the meaning of the terms "real estate" and "improvements".

Percent Good Schedule:

A schedule used to calculate the approximate remaining value of an item of personal property. Multiplying the appropriate percentage from the table, based on the class of property and its age, by the historical cost will yield the percent good, or remaining value.

Escaped Property:

"Escaped property" means any property, whether personal, land, or any improvements to the property, subject to taxation and is: inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed to the wrong taxpayer by the assessing authority;

Undervalued or omitted from the tax rolls because of the failure of the taxpayer to comply with the reporting requirements of this chapter; or

Undervalued because of errors made by the assessing authority based upon incomplete or erroneous information furnished by the taxpayer.

Property which is undervalued because of the use of a different valuation methodology or because of a different application of the same valuation methodology is not "escaped property."

Property Willfully Concealed:

Any property found to be willfully concealed, removed, transferred, or misrepresented by its owner or agent in order to evade taxation is subject to a penalty equal to the tax on its value, and neither the penalty nor assessment may be reduced or waived by the assessor, county, county Board of Equalization, or the commission, except pursuant to a procedure for the review and approval of waivers adopted by county ordinance, or by administrative rule adopted in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.