Bill to curb Idaho's business personal-property tax introduced

zkyle@idahostatesman.comMarch 10, 2014 

The House Revenue and Taxation Committee has voted to introduce a bill that its cosponsor, Star Republican Mike Moyle, hopes to be the next step in phasing out all personal property taxes on business.

“The goal is to ultimately to end personal property tax for everybody,” Moyle, the House majority leader, told the committee Monday.

The Legislature started rolling back the tax last year with House Bill 315, which exempted businesses from paying the first $100,000 owed in personal property tax in each Idaho county where the tax was assessed. The law also exempted any personal property valued at less than $3,000.

Personal property is equipment, furnishings and other items a business owns. It differs from real property, which consists of land and buildings. Businesses have long sought relief from the tax and its burdensome record-keeping requirements, but many Idaho counties depend heavily upon it for revenue.

The enactment of last year's law was a victory for business lobbies such as the Idaho Association of Commerce and Industry and the Idaho Chamber Alliance. Those groups are also behind this year’s effort, which was cosponsored by House Speaker Scott Bedke, R-Oakley.

The bill passed last year saved businesses about $19 million in personal property taxes. The Legislature appropriated replacement funds that were distributed to local governments to make up for the revenue loss. Expanding the exemption to $250,000 would cost the state an additional $8.7 million in tax revenue that would also be replaced.

Last year’s law exempted 90 percent of all Idaho businesses from paying personal property tax, said Alex LaBeau, president of IACI. This year’s bill would provide additional breaks for some of the large companies still paying the tax by tweaking the definition of what counts as personal property.

The bill would change how the tax on some large property owned by businesses would be calculated. Cell towers, for example, would be taxes as real property rather than personal property. One point of debate, railroad tracks, would stay in the personal property category.

LaBeau said bill language differentiating personal property from real property was contradictory and would have to be reworked.

The three Democrats on the committee — Grant Burgoyne of Boise, Mat Erpelding of Boise and Carolyn Meline of Pocatello — voted against advancing the proposal.

The bill was going to be presented by Terreton Republican Jeff Siddoway, the Chairman of the Senate Local Government and Taxation Committee. However, Siddoway withdrew from the hearing when Moyle and Bedke swapped out the personal property language that Siddoway preferred for a percentage-based calculation.

"The governor's office is pretty tight with IACI, and they want a percentage in there," Siddoway told the Statesman's Dan Popkey. "I want definitions."

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