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Scorecard 2021

HB 21-1312: Insurance Premium Property Sales Severance Tax

Bill Summary:

The bill makes changes to several state and local government taxes.

Insurance premium tax. Currently, the insurance premium tax is equal to 2% of premiums collected or contracted for covering property or risks in this state; except that a company that is deemed to maintain a home office or regional home office in this state pays tax of 1%. Section 2 of the bill requires a company to have at least 2.5% a minimum percentage of its total domestic workforce in the state in order for the company to be deemed to maintain a home office or regional home office. This percentage is 2% for 2022, 2.25% for 2023, and 2.5% for 2024 and thereafter. This section also narrows the tax exemption for annuities considerations to those that are purchased in connection with a qualified retirement plan, a Roth 401(k), or an individual retirement account. For the purpose of auditing a company's tax statement, section 2 also authorizes the commissioner of insurance to appoint an independent examiner to conduct an examination on behalf of the commissioner.Property tax. For purposes of imposing the property tax, section 4 requires the actual value of real property to reflect the value of the fee simple estate. Section 5 requires that the actual value of personal property be determined based on the property's value in use, which will be defined by the property tax administrator.

There is an exemption from property tax for business personal property that would otherwise be listed on a single personal property if the property is less than a certain amount, which increases with inflation each property tax cycle. For the next current property tax cycle, section 6 increases the exemption from $7,900 to $50,000. Similar to the reimbursement for the homestead exemption, the state is required to reimburse local governments for lost property tax revenue caused by the increase. The first reimbursement will be based on actual property tax schedules filed, and future reimbursements will be adjusted estimates based on the initial amount. Section 7 requires the assessor to provide an estimate of the exempt business personal property along with the certifications to local governments.Sales and use tax. The state sales and use tax is imposed on the sale and use of tangible personal property. Section 7 8 codifies the department of revenue rule that the definition of "tangible personal property" includes "digital goods". Section 8 9 specifies that the state sales tax applies to amounts charged for mainframe computer access, photocopying, and packing and crating.

A retailer who collects state sales tax is currently allowed to retain 4% of the state sales taxes collected, with a monthly cap of $1,000, as compensation for the retailer's expenses incurred in collecting and remitting the tax (vendor fee). Beginning January 1, 2022, section 9 10 eliminates the vendor fee for any filing period that the retailer's total taxable sales were greater than $1 million.Severance taxes. The severance tax on oil and gas is currently imposed on gross income, which is equal to the net amount realized for the sale of the oil and gas. The net amount realized is equal to the gross lease revenues, less deductions for any transportation, manufacturing, or processing costs by the taxpayer borne by the taxpayer (netback deductions). Section 10 11 limits the netback deductions to direct costs actually paid by the taxpayer for those purposes, which disallows costs of capital and other indirect expenses.

Currently, the first 300,000 tons of coal produced in each quarter is exempt from the property tax. There is also a tax credit equal to 50% for coal produced from underground mines and another credit in the same amount for lignitic coal. Beginning with the 2022 taxable year, section 11 12 phases out the quarterly exemption and both tax credits. The additional severance tax that results from these changes is credited to the just transition cash fund under section 12 13 .

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

CEA Position Rationale: We have been in support of the process last year and this year of efforts to close corporate tax loopholes. We should be in support because this is a continuing fight. 
Tier: 3

CEA Supported

House Status: Passed
Senate Status: Passed
Final Status: Passed

Read the bill (PDF) »

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Pro-Education VoteAnti-Education VoteNo vote taken

House Votes:

Amabile, JudyDemocrat13Pro-Environment Vote
Bacon, JenniferDemocrat7Pro-Environment Vote
Baisley, MarkRepublican39Anti-Environment Vote
Benavidez, AdrienneDemocrat32Pro-Environment Vote
Bernett, TracyDemocrat12Pro-Environment Vote
Bird, ShannonDemocrat35Pro-Environment Vote
Bockenfeld, RodRepublican56Anti-Environment Vote
Boesenecker, AndrewDemocrat53Pro-Environment Vote
Bradfield, MaryRepublican21Anti-Environment Vote
Caraveo, YadiraDemocrat31Pro-Environment Vote
Carver, TerriRepublican20Anti-Environment Vote
Catlin, MarcRepublican58Anti-Environment Vote
Cutter, LisaDemocrat25Pro-Environment Vote
Daugherty, LindseyDemocrat29Pro-Environment Vote
Duran, MonicaDemocrat24Pro-Environment Vote
Esgar, DaneyaDemocrat46Pro-Environment Vote
Exum, TonyDemocrat17Pro-Environment Vote
Froelich, MegDemocrat3Pro-Environment Vote
Garnett, AlecDemocrat2Pro-Environment Vote
Geitner, TimRepublican19Anti-Environment Vote
Gonzales-Gutierrez, SerenaDemocrat4Pro-Environment Vote
Gray, MattDemocrat33Pro-Environment Vote
Hanks, RonRepublican60Anti-Environment Vote
Herod, LeslieDemocrat8Pro-Environment Vote
Holtorf, RichardRepublican64Anti-Environment Vote
Hooton, EdieDemocrat10Pro-Environment Vote
Jackson, DominiqueDemocrat42Pro-Environment Vote
Jodeh, ImanDemocrat41Pro-Environment Vote
Kennedy, ChrisDemocrat23Pro-Environment Vote
Kipp, CathyDemocrat52Pro-Environment Vote
Larson, ColinRepublican22Anti-Environment Vote
Lontine, SusanDemocrat1Pro-Environment Vote
Luck, StephanieRepublican47Excused
Lynch, MikeRepublican49Anti-Environment Vote
McCluskie, JulieDemocrat61Pro-Environment Vote
McCormick, KarenDemocrat11Pro-Environment Vote
McKean, HughRepublican51Anti-Environment Vote
McLachlan, BarbaraDemocrat59Pro-Environment Vote
Michaelson Jenet, DafnaDemocrat30Pro-Environment Vote
Mullica, KyleDemocrat34Pro-Environment Vote
Neville, PatrickRepublican45Anti-Environment Vote
Ortiz, DavidDemocrat38Pro-Environment Vote
Pelton, RodRepublican65Anti-Environment Vote
Pico, AndresRepublican16Anti-Environment Vote
Ransom, KimRepublican44Anti-Environment Vote
Rich, JaniceRepublican55Anti-Environment Vote
Ricks, NaquettaDemocrat40Pro-Environment Vote
Roberts, DylanDemocrat26Pro-Environment Vote
Sandridge, ShaneRepublican14Anti-Environment Vote
Sirota, EmilyDemocrat9Pro-Environment Vote
Snyder, MarcDemocrat18Pro-Environment Vote
Soper, MattRepublican54Anti-Environment Vote
Sullivan, TomDemocrat37Pro-Environment Vote
Tipper, KerryDemocrat28Pro-Environment Vote
Titone, BriannaDemocrat27Pro-Environment Vote
Valdez, AlexDemocrat5Pro-Environment Vote
Valdez, DonaldDemocrat62Pro-Environment Vote
Van Beber, TonyaRepublican48Anti-Environment Vote
Van Winkle, KevinRepublican43Anti-Environment Vote
Weissman, MikeDemocrat36Pro-Environment Vote
Will, PerryRepublican57Anti-Environment Vote
Williams, DaveRepublican15Anti-Environment Vote
Woodrow, StevenDemocrat6Pro-Environment Vote
Woog, DanRepublican63Anti-Environment Vote
Young, MaryDemocrat50Pro-Environment Vote

Senate Votes:

Bridges, JeffDemocrat26Pro-Education Vote
Buckner, JanetDemocrat28Pro-Education Vote
Coleman, JamesDemocrat33Pro-Education Vote
Cooke, JohnRepublican13Anti-Education Vote
Coram, DonRepublican6Anti-Education Vote
Danielson, JessieDemocrat20Pro-Education Vote
Donovan, KerryDemocrat5Pro-Education Vote
Fenberg, StephenDemocrat18Pro-Education Vote
Fields, RhondaDemocrat29Pro-Education Vote
Garcia, LeroyDemocrat3Pro-Education Vote
Gardner, BobRepublican12Anti-Education Vote
Ginal, JoannDemocrat14Pro-Education Vote
Gonzales, JulieDemocrat34Pro-Education Vote
Hansen, ChrisDemocrat31Pro-Education Vote
Hisey, DennisRepublican2Anti-Education Vote
Holbert, ChrisRepublican30Anti-Education Vote
Jaquez Lewis, SonyaDemocrat17Pro-Education Vote
Kirkmeyer, BarbaraRepublican23Anti-Education Vote
Kolker, ChrisDemocrat27Pro-Education Vote
Lee, PeteDemocrat11Pro-Education Vote
Liston, LarryRepublican10Anti-Education Vote
Lundeen, PaulRepublican9Anti-Education Vote
Moreno, DominickDemocrat21Pro-Education Vote
Pettersen, BrittanyDemocrat22Pro-Education Vote
Priola, KevinRepublican25Anti-Education Vote
Rankin, BobRepublican8Anti-Education Vote
Rodriguez, RobertDemocrat32Pro-Education Vote
Scott, RayRepublican7Anti-Education Vote
Simpson, CleaveRepublican35Anti-Education Vote
Smallwood, JimRepublican4Anti-Education Vote
Sonnenberg, JerryRepublican1Anti-Education Vote
Story, TammyDemocrat16Pro-Education Vote
Winter, FaithDemocrat24Pro-Education Vote
Woodward, RobRepublican15Anti-Education Vote
Zenzinger, RachelDemocrat19Pro-Education Vote