HB 23-1240

Abstract

Section 1 of the bill creates a state sales and use tax exemption for construction and building materials purchased on or after January 1, 2020, but before July 1, 2025, to be used directly in rebuilding or repairing a residential structure damaged or destroyed by a declared wildfire disaster in calendar year 2020, 2021, or 2022 (wildfire rebuild exemption). A qualified homeowner , or a contractor employed by a homeowner, may obtain may claim a refund based on the wildfire rebuild exemption after obtaining a building permit and a wildfire rebuild exemption certificate from the local government authorized to issue a building permit in the area in which the residential structure to be repaired or rebuilt (qualified residential structure) is located. To be qualified, a homeowner must certify that: The homeowner was the owner of each the qualified residential structure to be repaired or rebuilt at the time the structure was damaged or destroyed by the declared wildfire disaster; and The replacement cost for each qualified residential structure to be repaired or rebuilt exceeds the homeowner's coverage under any homeowner's insurance policy associated with the structure. To claim the exemption, the qualified homeowner, or contractor employed by such homeowner, must provide a copy of the wildfire rebuild exemption certificate to each retailer from which the homeowner or contractor purchases exempt construction or building materials. If a qualified homeowner, or contractor employed by such homeowner, has paid state sales or use tax on the purchase of exempt construction or building materials on or after January 1, 2020, but before July 1, 2025, then the person who made the purchase may apply to the department of revenue for a refund pursuant to existing sales and use tax refund procedures. Alternatively, if the purchaser-contractor has not been granted a refund, the homeowner for whom the exempt materials were purchased may apply for a refund by establishing certain existing statutory requirements are met. The amount of the refund is equal to 2.9% of the estimated construction and building materials cost for repairing or rebuilding the qualified residential structure. The estimated construction and building materials cost is the cost amount used by the local government to collect estimated use tax, as stated in the building permit. If no estimated use tax has been collected, the estimated construction and building materials cost is half of the total contract price or total cost for rebuilding or repairing the qualified residential structure.Sections 2 and 3 include the wildfire rebuild exemption among other exemptions available to state-collected and administered local sales and use tax jurisdictions, including statutory cities and counties, for adoption at their discretion. Section 2 makes a conforming amendment to the 3-year statute of limitations for state sales and use tax refund claims, allowing a qualified homeowner to claim a refund based on the wildfire rebuild exemption at any time on or before June 30, 2028. Section 3 appropriates $98,136 to the department of revenue for the 2023-24 state fiscal year for personal services and operating expenses associated with administering the wildfire rebuild exemption. (Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.) (Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)