Idaho House committee puts personal property tax back in the cross hairs

New legislation would further whittle down the business assessment.

zkyle@idahostatesman.comMarch 11, 2014 

Note: The first $100,000 of personal property a business owns in each county is exempted from personal property tax under the current law. An incorrect definition of the exemption printed in the original version of this story has been changed.

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

“The goal is to ultimately end personal property tax for everybody,” Moyle, a Republican from Star, told the committee Monday.

The Legislature started rolling back the tax last year with House Bill 315, which exempted businesses from paying taxes on the first $100,000 of personal property 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 taxed 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 and Mat Erpelding of Boise, and Carolyn Meline of Pocatello — voted against advancing the proposal.

Zach Kyle: 377-6464

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