nonresidential construction fell 22 percent in June and is down 15 percent overall; taxable sales rose 6.5 percent in May and are up 6.6 percent overall; and payroll tax rose 35 percent in May
and is up 3 percent overall.
3. Report of the Legislative Auditor General: Residential Property Tax Assessment
a. Audit Report -- Wayne Welsh, Legislative Auditor General, introduced the report, "Residential Tax Assessment Practices." Rick Coleman, Audit Manager, said that the objective
of the audit was to evaluate local property tax valuation practices to determine if they are fair and
consistent with statutory provisions. The major findings of the report included: (1) further
improvement in assessment practices may require additional resources; (2) the role of the tax
commission needs clarification; and (3) assessment and appeal practices in Salt Lake County are
fair.
Mr. Coleman said that if the Legislature wants better assessor performance, it may need to
ensure that assessor offices receive more of the state assessing and collecting (A&C) levy
established to fund property assessments. He added that some assessors report that a lack of
qualified staff and other resources resulting from inadequate funding makes it difficult for them
to fulfill their legislatively mandated responsibilities.
Mr. Coleman said there are three ways that the tax commission and the Property Tax
Division of the tax commission ("PTD") ensures assessed values are equitable. First, the PTD
provides training, assistance, and general supervision to county assessors and their staff. Second
the PTD evaluates the counties' assessment performance and valuation practices. Third, when
necessary, the tax commission orders counties to adjust values or complete specific assessment
activities.
b. Agency Response -- Mr. W. Val Oveson, Chair, tax commission, said that his office is in agreement with most of the report. He noted that the time lag has been reduced from 3 years
to 18 months. He said he would follow up and continue to improve the process.
c. Response from County Assessors-- Mr. Lee Gardner, Salt Lake County Assessor, was not present for comment.
d. Public Comment -- Mr. Donald Stromquist, residential taxpayer, said that he has disputed the methods used by the county assessors to value his property. He said that his request
for a valuation reduction was denied based on a newspaper report that he felt was inaccurate. He
noted he surveyed 90 of his neighbors and found that only three were given significant valuation
increases and felt that his property was singled out for unfair treatment. He asked that the
committee consider legislation to restrict the amount that homeowners can have their taxes raised
in any given year. Sen. Nielson asked that Mr. Stromquist submit a list of things he disagrees
with in the audit.
4. Individual Income and Corporate Franchise and Income Tax Credits_
a. Background Information on Existing Credits-- Mr. Howe distributed a handout titled "Individual Income and Corporate Franchise and Income Tax Credits, Utah, 1997." He
explained how tax credits are claimed and applied. He noted the number of credits claimed are
very small in comparison with the number of total taxpayers filing. He said that Sen. Hillyard
requested the study with the intention of simplifying the tax system. Mr. Macdonald said that on
page one the credit for bond interest is for municipal bonds only. Mr. Howe suggested that the
section needed further clarification.
Sen. Nielson asked for a definition of nonrefundable and refundable. Ms. Rockwell said
she was not aware of a statutory definition for refundable and nonrefundable. Mr. Oveson said
there have never been any disputes over these definitions.
b. Committee Discussion and Direction for Future Action _ Rep. Tyler asked that the "nd" (nondisclosable) figures be added to the total.
MOTION: Sen. Mantes moved to have staff look at other states and work with the tax commission to see if some of the tax credits could be eliminated. The motion passed
unanimously. Sens. Dmitrich, Poulton, and Rep. Short were absent for the vote.
5. Valuation of Intangibles for Property Tax Purposes_ Chair Short outlined the changes made during the special session.
MOTION: Sen. Mantes moved to have staff look at the definition of "intangibles" in the Utah Constitution and work with the Constitutional Revision Commission to find proposed
language to clarify the taxation of intangibles. The motion passed unanimously. Sens. Dmitrich,
Poulton, and Rep. Short were absent for the vote.
6. Other Business -- The committee did not discuss any other business..
7. Adjournment --
MOTION: Rep. Buffmire moved to adjourn the meeting at 4:15 p.m. The motion passed unanimously. Sens. Dmitrich, Poulton, and Rep. Short were absent for the vote.
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