SB 1028

Senate Bill (SB) 1028: municipal TPT exemptions; leases; LLC

Sponsor: Senator Reagan

Overview: SB 1028 prohibits the collection of commercial lease sales tax on income derived from a lease between two LLCs with the same members or managers.

League Position: NEUTRAL - This change will mean a revenue loss for some cities, but the legislature has made it clear through the number of bills that have passed in recent years on this same issue that they do not want commercial lease sales tax collected on income derived on leases between affiliated entities.

Summary: SB 1028 prevents cities from collecting commercial lease sales tax on lease arrangements between LLCs that are owned by the same shareholders. This type of activity is already exempted from commercial lease sales tax for several other corporate structures leasing property under the same conditions.

Updates

01/23/13: The bill was held in Senate Finance at the request of Senator Reagan, so that an amendment can be crafted with in cooperation with the League.

02/06/13: The bill unanimously passed out of the Senate Finance Committee with amendments to address our concerns.

02/14/13: The bill passed out of Senate COW with the amendments to address our concerns. The bill now proceeds to Third Read.

02/18/13: SB 1028 passed out of the Senate 30-0. The bill now proceeds to the House.