House Finance considers codifying 'fixture' and 'affixed' tests for REET

Senate Bill 6114, heard Feb. 26 by the House Finance Committee, would add statutory definitions for 'fixture' and 'affixed' for state excise-tax (REET) purposes and replace the common-law three-prong fixture test with statutory criteria focused on documentation, intended function, and the difficulty of movement.

Committee staff said the change is intended to reduce taxpayer confusion, and the Department of Revenue (DOR) said the bill is a process-improvement measure that should not alter which items are classified as fixtures. Steve Ewing of DOR illustrated typical scenarios: a length of hose sitting on a shelf remains personal property, while an irrigation system buried and integrated with a property would be considered affixed. Conversely he said expensive copier-printers that are wheeled in and out of a building would generally remain personal property for REET purposes.

DOR answered members’ questions about retroactivity (the agency said the bill is not retroactive) and review practices at the county level, and emphasized that the bill aims to make determinations more observable and easier to administer.

The committee closed the hearing on SB 6114 at the conclusion of testimony and questions.