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SB 2995

Ad valorem taxes; authorize local governments to grant exemptions for raw materials and work in progress inventory.

2025 Regular Session Introduced by David Parker

Allows local governments to exempt raw materials and work-in-progress inventory from ad valorem taxes.

Died In Committee
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Bill Summary · SB 2995

SB 2995 — Summary

Title: Ad valorem taxes; authorize local governments to grant exemptions for raw materials and work in progress inventory
Sponsor: Sen. Polk
Classification / Subjects: Bill — Accountability, Efficiency, Transparency; Finance; Ways and Means
Introduced: March 14, 2025

Purpose / Intent

SB 2995 would authorize local governments to exempt certain inventory items — specifically raw materials and work‑in‑progress inventory — from ad valorem (property) taxation. The intent is to give local taxing authorities an option to reduce the property tax burden on businesses that hold raw materials or unfinished goods, potentially supporting manufacturing, processing, or similar industries.

Key provisions

  • Authorizes (grants the power to) local governments to adopt exemptions from ad valorem taxation for:
    • Raw materials inventory; and
    • Work‑in‑progress inventory.
  • Amendment No. 1 (adopted by voice vote) added a repeal/sunset clause: the authorization “shall stand repealed on June 30, 2025.” (See Procedural History below for apparent timing anomalies.)

Note: The text of the bill beyond the title and the amendment is not provided here. The summary therefore describes the scope as stated (authorization for local exemptions) but does not include implementation details (definitions, eligibility, filing requirements, or procedural steps for local adoption) because they are not present in the supplied material.

Who would be affected

  • Businesses that hold significant raw materials or work‑in‑progress inventory (e.g., manufacturers, processors): would become eligible for lower local property tax bills where a local exemption is adopted.
  • Local governments and taxing districts (counties, municipalities, school districts): would gain discretion to grant exemptions but could experience reduced ad valorem tax revenues where exemptions are used.
  • Potential downstream effects on local budgets (services, school funding) depending on uptake and whether localities offset revenue changes.

Procedural history & current status (inconsistent records)

The supplied documents contain conflicting entries:
- Top-line status: “Died In Committee” (noted 2025-03-18).
- A detailed legislative actions log, however, records committee consideration, floor passage, enrollment, signatures, and a Governor’s signature (signed 2025-06-20) with an “Effective on 9/1/25” entry.
- Amendment No. 1 (adopted) added a repeal date of June 30, 2025 — which would repeal the authorization before the listed effective date (9/1/25), an internal inconsistency.

Because of these contradictions, readers should consult the official enrolled bill or the state legislature’s final status page to confirm whether SB 2995 ultimately became law, the final text, and the actual effective/sunset dates.

Fiscal and policy considerations

  • Potential reduction in ad valorem/property tax revenues for local taxing entities if exemptions are adopted.
  • Potential economic benefit to local manufacturers through lower carrying costs and tax burden on inventory.
  • Local discretion (optional adoption) means fiscal impacts would vary by jurisdiction.
  • If the repeal date is enforced as amended (June 30, 2025), the authorization would be temporary; if the bill’s effective date is Sept 1, 2025, the repeal provision and effective date conflict and require clarification.

Recommendation

Verify the final enrolled bill and the official legislative status on the state legislature’s website (or the Secretary of State’s session laws) to resolve the procedural/date inconsistencies and to review the full statutory language (definitions, limits, adoption procedure) before assessing concrete implementation or fiscal effects.

Compiled from official sources — confirm details with the bill’s official record.

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