Senate committee approves bill to codify court-made rule preserving sales-tax exemptions
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Summary
The Revenue & Tax Committee approved House Bill 1716, presented by Representative Frank Kavanaugh, to convert a line of case law into statute so that existing sales-tax exemptions remain in effect until the law is changed; committee members recorded no fiscal impact and the motion passed unanimously in committee.
The Senate Revenue & Tax Committee on an unspecified date approved House Bill 1716, a measure to codify court-made rules that preserve existing sales-tax exemptions for manufacturers and similar taxpayers until the Legislature changes the law. Representative Frank Kavanaugh, District 30, presented the bill.
"This is just a bill that I worked with DFNA on. It's actually taking case law and make it statute," Kavanaugh said, summarizing the measure. He told committee members that the change would make explicit in statute what state courts have held in case law: where a sales-tax exemption has been granted, that exemption remains in effect unless and until the Legislature changes the law.
The bill was assigned a fiscal impact of "none" by the presenting staff. Committee members asked no substantive follow-up questions during the presentation. Representative Kavanaugh closed by asking for a favorable vote.
Senator Hester moved to pass the bill; Senator Petty seconded. The committee voice vote was recorded as all in favor and no opposition was recorded, and the chair announced the motion carried.
Because the bill preserves existing exemptions rather than creating new ones, proponents said it clarifies the status quo for taxpayers and tax administrators. The committee did not take a roll-call recorded vote in the transcript; the committee recorded the motion, the second and a unanimous voice vote.