Enrolled Copy S.B. 243
1 AIRCRAFT PROPERTY TAX MODIFICATIONS
2024 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Curtis S. Bramble House Sponsor: Calvin R. Musselman
2
3 LONG TITLE
4 General Description:
5 This bill modifies provisions related to property tax assessment for aircrafts.
6 Highlighted Provisions:
7 This bill:
8 ▸ limits the type of airline property subject to property tax assessment by the State Tax
9 Commission to mobile flight equipment;
10 ▸ provides that airline property other than mobile flight equipment is subject to local
11 property tax assessment;
12 ▸ clarifies the manner in which a fleet adjustment is made by the State Tax Commission to
13 determine the fair market value of an aircraft fleet; and
14 ▸ makes technical and conforming changes.
15 Money Appropriated in this Bill:
16 None
17 Other Special Clauses:
18 This bill provides a special effective date.
19 Utah Code Sections Affected:
20 AMENDS:
21 59-2-201, as last amended by Laws of Utah 2023, Chapter 471
22 59-2-202, as last amended by Laws of Utah 2008, Chapter 382
23 59-2-204, as last amended by Laws of Utah 1999, Chapter 71
24 59-2-801, as last amended by Laws of Utah 2020, Chapter 38
25
26 Be it enacted by the Legislature of the state of Utah:
27 Section 1. Section 59-2-201 is amended to read:
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28 59-2-201 . Assessment by commission -- Determination of value of mining
29 property -- Determination of value of aircraft -- Notification of assessment -- Local
30 assessment of property assessed by the unitary method -- Commission may consult with
31 county.
32 (1) (a) By May 1 of each year, the following property, unless otherwise exempt under
33 the Utah Constitution or under Part 11, Exemptions, shall be assessed by the
34 commission at 100% of fair market value, as valued on January 1, in accordance with
35 this chapter:
36 (i) except as provided in Subsection (2), all property that operates as a unit across
37 county lines, if the values must be apportioned among more than one county or
38 state;
39 (ii) all property of public utilities;
40 (iii) all [operating property of] mobile flight equipment of an airline, air charter
41 service, and air contract service;
42 (iv) all geothermal fluids and geothermal resources;
43 (v) all mines and mining claims except in cases, as determined by the commission,
44 where the mining claims are used for other than mining purposes, in which case
45 the value of mining claims used for other than mining purposes shall be assessed
46 by the assessor of the county in which the mining claims are located; and
47 (vi) all machinery used in mining, all property or surface improvements upon or
48 appurtenant to mines or mining claims. For the purposes of assessment and
49 taxation, all processing plants, mills, reduction works, and smelters that are
50 primarily used by the owner of a mine or mining claim for processing, reducing,
51 or smelting minerals taken from a mine or mining claim shall be considered
52 appurtenant to that mine or mining claim, regardless of actual location.
53 (b) (i) [For purposes of ]Subsection (1)(a)(iii)[, operating property of an air charter
54 service] does not include an aircraft that is:
55 (A) used by [the] an air charter service for air charter; and
56 (B) owned by a person other than the air charter service.
57 (ii) For purposes of this Subsection (1)(b):
58 (A) "person" means a natural person, individual, corporation, organization, or
59 other legal entity; and
60 (B) a person does not qualify as a person other than the air charter service as
61 described in Subsection (1)(b)(i)(B) if the person is:
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62 (I) a principal, owner, or member of the air charter service; or
63 (II) a legal entity that has a principal, owner, or member of the air charter
64 service as a principal, owner, or member of the legal entity.
65 (iii) Except as provided in Subsection (1)(a)(iii), property in the state owned by an
66 airline, air charter service, or air contract service shall be assessed by the local
67 county assessor.
68 (2) (a) The commission may not assess property owned by a telecommunications service
69 provider.
70 (b) The commission shall assess and collect property tax on state-assessed commercial
71 vehicles at the time of original registration or annual renewal.
72 (i) The commission shall assess and collect property tax annually on state-assessed
73 commercial vehicles that are registered pursuant to Section 41-1a-222 or
74 41-1a-228.
75 (ii) State-assessed commercial vehicles brought into the state that are required to be
76 registered in Utah shall, as a condition of registration, be subject to ad valorem tax
77 unless all property taxes or fees imposed by the state of origin have been paid for
78 the current calendar year.
79 (iii) Real property, improvements, equipment, fixtures, or other personal property in
80 this state owned by the company shall be assessed separately by the local county
81 assessor.
82 (iv) The commission shall adjust the value of state-assessed commercial vehicles as
83 necessary to comply with 49 U.S.C. Sec. 14502, and the commission shall direct
84 the county assessor to apply the same adjustment to any personal property, real
85 property, or improvements owned by the company and used directly and
86 exclusively in their commercial vehicle activities.
87 (3) (a) The method for determining the fair market value of productive mining property
88 is the capitalized net revenue method or any other valuation method the commission
89 believes, or the taxpayer demonstrates to the commission's satisfaction, to be
90 reasonably determinative of the fair market value of the mining property.
91 (b) The commission shall determine the rate of capitalization applicable to mines,
92 consistent with a fair rate of return expected by an investor in light of that industry's
93 current market, financial, and economic conditions.
94 (c) In no event may the fair market value of the mining property be less than the fair
95 market value of the land, improvements, and tangible personal property upon or
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96 appurtenant to the mining property.
97 (4) (a) As used in this Subsection (4), "aircraft pricing guide" means a nationally
98 recognized publication that assigns value estimates for individual commercial aircraft
99 that are:
100 (i) identified by year, make, and model; and
101 (ii) in average condition typical for the aircraft's type and vintage.
102 (b) (i) Except as provided in Subsection (4)(d), the commission shall use an aircraft
103 pricing guide[, adjusted as provided in Subsection (4)(c),] to determine the fair
104 market value of aircraft assessed under this part.
105 (ii) The commission shall use the Airliner Price Guide as the aircraft pricing guide,
106 except that:
107 (A) if the Airliner Price Guide is no longer published or the commission
108 determines that another aircraft pricing guide more reasonably reflects the fair
109 market value of aircraft, the commission, after consulting with the airlines
110 operating in the state, shall select an alternative aircraft pricing guide;
111 (B) if an aircraft is not listed in the Airliner Price Guide, the commission shall use
112 the Aircraft Bluebook Price Digest as the aircraft pricing guide; and
113 (C) if the Aircraft Bluebook Price Digest is no longer published or the
114 commission determines that another aircraft pricing guide more reasonably
115 reflects the fair market value of aircraft, the commission, after consulting with
116 the airlines operating in the state, shall select an alternative aircraft pricing
117 guide.
118 (c) (i) [To reflect the value of an] The commission shall make a fleet adjustment in
119 accordance with Subsection (4)(c)(ii) or (iii) to assess the fair market value of a
120 fleet of aircraft or a fleet of the same aircraft type that is used as part of the [
121 operating property] mobile flight equipment of an airline, air charter service, or air
122 contract service[, the fair market value of the aircraft shall include a fleet
123 adjustment as provided in this Subsection (4)(c)].
124 (ii) If the aircraft pricing guide provides [a method for making] for a fleet adjustment
125 to determine the fair market value of the fleet of aircraft or the fleet of the same
126 aircraft type, the commission shall [use the method described] make the fleet
127 adjustment in the manner provided in the aircraft pricing guide.
128 (iii) If the aircraft pricing guide does not provide [a method for making] for a fleet
129 adjustment to determine the fair market value of the fleet of aircraft or the fleet of
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130 the same aircraft type, the commission shall make [a fleet adjustment by reducing
131 the aircraft pricing guide value of each aircraft in the fleet by .5% for each aircraft
132 over three aircraft up to a maximum 20% reduction] the adjustment the
133 commission determines most reasonably reflects the fair market value of the fleet
134 of aircraft or fleet of the same aircraft type.
135 (d) The commission may use an alternative method for valuing aircraft of an airline, air
136 charter service, or air contract service if the commission:
137 (i) has clear and convincing evidence that the aircraft values reflected in the aircraft
138 pricing guide do not reasonably reflect fair market value of the aircraft; and
139 (ii) cannot identify an alternative aircraft pricing guide from which the commission
140 may determine aircraft value.
141 (5) Immediately following the assessment, the commission shall send, by certified mail,
142 notice of the assessment to the owner or operator of the assessed property and the
143 assessor of the county in which the property is located.
144 (6) The commission may consult with a county in valuing property in accordance with this
145 part.
146 (7) The local county assessor shall separately assess property that is assessed by the unitary
147 method if the commission determines that the property:
148 (a) is not necessary to the conduct of the business; and
149 (b) does not contribute to the income of the business.
150 Section 2. Section 59-2-202 is amended to read:
151 59-2-202 . Statement of taxpayer -- Extension of time for filing -- Assessment
152 without statement -- Penalty for failure to file statement or information --
153 Waiver, reduction, or compromise of penalty -- Appeals.
154 (1) (a) A person, or an officer or agent of that person, owning or operating property
155 described in Subsection (1)(b) shall, on or before March 1 of each year, file with the
156 commission a statement:
157 (i) signed and sworn to by the person, officer, or agent;
158 (ii) showing in detail all real property and tangible personal property located in the
159 state that the person owns or operates;
160 (iii) containing the number of miles of taxable tangible personal property in each
161 county:
162 (A) that the person owns or operates; and
163 (B) as valued on January 1 of the year for which the person, officer, or agent is
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164 furnishing the statement; and
165 (iv) containing any other information the commission requires.
166 (b) Subsection (1)(a) applies to:
167 (i) the following property located in the state:
168 (A) a public utility;
169 (B) mobile flight equipment of an airline;
170 (C) mobile flight equipment of an air charter service; or
171 (D) mobile flight equipment of an air contract service; or
172 (ii) the following property located in more than one county in the state:
173 (A) a pipeline company;
174 (B) a power company;
175 (C) a canal company;
176 (D) an irrigation company; or
177 (E) a telephone company.
178 (c) (i) The commission may allow an extension for filing the statement under
179 Subsection (1)(a) for a time period not exceeding 30 days, unless the commission
180 determines that extraordinary circumstances require a longer period of extension.
181 (ii) The commission shall grant a person, or an officer or agent of that person, an
182 extension for filing the statement under Subsection (1)(a) for a time period not
183 exceeding 15 days if:
184 (A) a federal regulatory agency requires the taxpayer to file a statement that
185 contains the same information as the statement under Subsection (1)(a); and
186 (B) the person, or an officer or agent of that person, requests the commission to
187 grant the extension.
188 (2) The commission shall assess and list the property described in Subsection (1)(b) using
189 the best information obtainable by the commission if a person, or an officer or agent of
190 that person, fails to file the statement required under Subsection (1)(a) on or before the
191 later of:
192 (a) March 1; or
193 (b) if the commission allows an extension under Subsection (1)(c) for filing the
194 statement, the day after the last day of the extension period.
195 (3) (a) Except as provided in Subsection (3)(c), the commission shall assess a person a
196 penalty as provided in Subsection (3)(b), if the person, or an officer or agent of that
197 person, fails to file:
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198 (i) the statement required under Subsection (1)(a) on or before the later of:
199 (A) March 1; or
200 (B) if the commission allows an extension under Subsection (1)(c) for filing the
201 statement, the day after the last day of the extension period; or
202 (ii) any other information the commission determines to be necessary to:
203 (A) establish valuations for assessment purposes; or
204 (B) apportion an assessment.
205 (b) The penalty described in Subsection (3)(a) is an amount equal to the greater of:
206 (i) 10% of the person's estimated tax liability under this chapter for the current
207 calendar year not to exceed $50,000; or
208 (ii) $100.
209 (c) (i) Notwithstanding Subsections (3)(a) and (4), the commission may waive,
210 reduce, or compromise a penalty imposed under this section if the commission
211 finds there are reasonable grounds for the waiver, reduction, or compromise.
212 (ii) If the commission waives, reduces, or compromises a penalty under Subsection
213 (3)(c)(i), the commission shall make a record of the grounds for waiving,
214 reducing, or compromising the penalty.
215 (4) The county treasurer shall collect the penalty imposed under Subsection (3) as provided
216 in Section 59-2-1308.
217 (5) A person subject to a penalty under Subsection (3) may appeal the penalty according to
218 procedures and requirements of Title 63G, Chapter 4, Administrative Procedures Act.
219 Section 3. Section 59-2-204 is amended to read:
220 59-2-204 . Record of assessment of public utility and air travel companies --
221 Review by county assessor.
222 (1) Each year, the commission shall prepare a record of assessment of the following
223 companies:
224