Key Takeaways:

• This year, MultiState's tax team tracked nearly 100 bills from 23 states that sought to reduce or eliminate taxes on tangible personal property (TPP). State lawmakers pursued a variety of types of legislation, ranging from full elimination of the tax to changing variables in the tax's calculation that reduce overall tax liability. Legislative success varied among states, but the consensus on the value of eliminating TPP taxes suggests ongoing efforts in this direction.

• Thirteen states introduced bills aiming to fully eliminate taxes on TPP or provide a 100 percent exemption. While several states took steps towards fully eliminating taxes on tangible personal property, Wisconsin made the most progress legislatively.

• Texas was the most active state, proposing six measures for TPP exemption, including constitutional amendments. Although TPP tax elimination was not included in the final deal, property tax reform remained a legislative focus in Texas.

• Wisconsin and West Virginia lawmakers succeeded in easing TPP tax burdens. Wisconsin eliminated the tax through a deal allowing Milwaukee to increase its local sales tax, while West Virginia implemented credits for TPP taxes paid as part of a broader effort to reduce personal income tax.

This year, MultiState's tax team has tracked nearly 100 bills from 23 states that sought to reduce or eliminate taxes on tangible personal property (TPP). While we often think of property taxes as the taxation of land or structures built on that land, TPP taxes extend this to any of the individual things that a business might utilize. This can include everything from office furniture, to industrial equipment, to saleable inventory. This is distinct from a sales tax, which is applied at the moment property is acquired through a transaction, and is instead a recurring ad valorem tax based on the state's appraisal of the value of that property.