SB 946 Summary

• Enacts the "Qualified Heavy Equipment Rental Personal Property Specific Tax Act" to exempt certain heavy equipment used in rental businesses from traditional property taxes beginning December 31, 2020.

• Imposes a 2% specific tax on rental transactions of qualified heavy equipment, collected by the renter from customers and remitted quarterly to the Department of Treasury beginning January 1, 2021.

• Requires qualified renters to file annual exemption statements with the Department of Treasury by December 1 and maintain rental records for 4 years; violations including fraudulent exemption claims are misdemeanors punishable by jail time (30 days to 6 months) or fines ($500 to $2,500).

• Creates a reimbursement fund from collected tax proceeds, with 90% distributed to local tax collecting units where equipment rental offices are located (based on historical taxable values) and 10% to units receiving no direct allocation; the Department retains up to $250,000 annually for administrative costs.

• Exempts equipment rentals to federal/state/local government entities and rentals crossing state lines from the new tax; does not allow tax increment finance authorities to capture these tax proceeds.