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Under current law, leased motor vehicles are not included in calculating property taxes if at least 50 percent of the miles driven by the vehicle in a tax year are for non-income producing purposes.
HB 2714 would add vehicles leased to governmental
entities, vehicles leased to organizations that are exempt from federal income taxation, or used
exclusively for religious, educational, or charitable purposes as non-income
producing vehicles and exempt from property taxes.
While we oppose the creation of new special tax exemptions that benefit one type of industry or one category of taxpayers at the expense of others, this does not truly fit that category of tax bill. The tax code is already filled with property tax exemptions for leased property. This bill includes certain property leased to the state and select organizations on equal footing with property used for other types of leased vehicles. For this reason, HB 2714 neither uplifts nor offends our liberty principles and we remain neutral.
Ultimately we would prefer a property tax system that is low-rate, broad-based, and treats all types of property equally rather than having numerous special exemptions for preferred groups of taxpayers.