Department of Finance and Administration
Legislative Impact Statement
Bill: SB80
Bill Subtitle: TO EXEMPT FROM GROSS INCOME A GAIN BY A TAXPAYER RESULTING FROM
THE ACQUISITION OF PROPERTY UNDER THE RIGHT OF EMINENT DOMAIN.
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Basic Change :
Sponsor: Sen. C. Penzo
SB80 creates a new exclusion from gross income when calculating net taxable income subject to state
income tax. SB80 excludes income that a taxpayer receives from an entity that acquires real property
from the taxpayer under eminent domain. This includes involuntary conversion of real property by a
state, county, or city, as well as by municipal utilities and other companies with the power of eminent
domain.
SB80 is effective for tax years beginning on or after January 1, 2023.
Revenue Impact :
FY2024 - $2.7M General Revenue Reduction
Taxpayer Impact :
A taxpayer that has property taken due to eminent domain will not have to report gains resulting from
the acquisition of property under the right of eminent domain.
Resources Required :
Computer records, tax forms, and instructions will need to be updated.
Time Required :
Adequate time is provided for implementation.
Procedural Changes :
Training manuals will need to be updated. Department employees will need to be educated as well as
the tax community.
Other Comments :
None.
Legal Analysis :
Current state law, § 26-51-404(b), adopts 26 U.S.C. § 1033 which excludes from gross income certain
gains resulting from the involuntary conversion of property. SB80 adds a blanket exclusion for gains
resulting from eminent domain without limitation.
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2/10/2023 11:16 AM 1


Statutes affected:
Old version SB80 V2 - 3-14-2023 09:18 AM: 26-51-404(b)
SB 80: 26-51-404(b)