Scott Riehl 2017-03-10 04:22:57
THE ELFA STATE RELATIONS TEAM IN 2016 tracked, monitored and—where needed—weighed in on 1,630 state bills in 48 states and the District of Colombia. We expect that number to surpass 2,000 in 2017.
By early March, every state legislature will be in session except for Louisiana, whose legislature will convene on April 10.
With most states currently in session, your team at ELFA is working to review and—where needed—address all early and prefiled bills. ELFA’s efforts are focused on identifying any and all measures that would wrongly infringe on the operations of ELFA members in the commercial sector.
Washington State Legislative Building
Among the early bills we have reviewed, many focus on consumer issues and short-term rentals from retail locations. As example, consumer oriented automatic renewal proposals in Oklahoma and Minnesota as well as a licensing bill filed in Oklahoma not relevant to long-term equipment lease agreements. Highlighted below are a few pieces of proposed legislation and state activity that have raised ELFA concern.
Indiana Legislation Focused on Taxing Certain Motorized Rentals/Leases
Two Indiana bills focus on taxing rentals/leases of specified motorized equipment. Proponents of House Bill 1351 wish to avoid entanglement with long-term equipment leases by ELFA members and wrote into the text that it is only applicable to contracts not to exceed 365 days. Although the sponsor of a separate bill, Senate Bill 308, may have the same intent, it lacks such language, is not linked to a statute with this limitation and is not supported by short-term rental interests as presently drafted. ELFA has initiated inquiries to learn about the objectives of Senate Bill 308 and to determine if it might be amended. Following review of information below, your comments can be sent to ELFA Vice President of State Government Relations Scott Riehl at sriehl@elfaonline.org.
Indiana Senate Bill 308 is not supported by short-term equipment rental stakeholders as it is introduced. ELFA has expressed concern that the text of the bill does not differentiate between short-term rentals and long-term leases that shall be assessed for property tax purposes. There are similarities to House Bill 1351 in as much as SB 308 relates to a “motorized heavy equipment vehicle,” but the text laying out the assessment of personal property tax covers equipment that is leased, or held for lease, by the owner and is otherwise subject to the personal property tax.
ELFA Washington State B&O Tax Workgroup Forming
ELFA seeks members to participate in a workgroup that would be active in the event Washington Governor Jay Inslee moves ahead with his announced intent to increase the state’s Business and Occupation (B&O) services tax rate applicable to lessors’ gross revenues from 1.5% to 2.5%. It is presently 0.471% on the gross revenue of rents and sales but on leases considered finance leases ($1 purchase option [po] leases) and loans, the interest is subject to this B&O services tax rate currently at 1.5%. Retailers would continue to be taxed at 0.471%, the same rate as on rents of a true lease (the Fair Market Value [FMV] lease). To engage with the workgroup, please send complete contact information to ELFA Vice President of State Government Relations Scott Riehl at sriehl@ elfaonline.org.
This 1% rate increase represents an approximate 67% tax increase on lessors’ gross interest revenue on Washington finance business. This is an expense to most lessors, particularly those more heavily engaged in $1 po leases. Classifications and tax rates are available at http://dor.wa.gov/Content/FindTaxesAndRates/BAndOTax/BandOrates.aspx.
Uniform Fraudulent Transfer Act Revisions Continue
Attempts by the Uniform Law Commission to revise the Uniform Fraudulent Transfer Act continue this year with introduction of Indiana Senate Bill 316, New Jersey Assembly Bill 3742, New York Assembly Bill 1853, South Carolina Senate Bill 136 / South Carolina House Bill 3167, Vermont House Bill 35 and Washington Senate Bill 5085. A full listing of uniform laws introduced the Uniform Law Commission homepage can be found at www. Uniformlaws.org/Legislation.aspx.
For more information, please contact Vice President of State Government Relations Scott Riehl at sriehl@ elfaonline.org.
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