The Boise Metro Chamber of Commerce is committed to accelerating the growth of new economic opportunities through tax policy reform. The chamber applauds the Legislature for addressing education funding shortfalls and will continue to advocate for education and workforce preparation. Jobs and the economy are also a priority for our chamber, and we think there is room to do both. Before our state senators and representatives leave town, we urge them to consider taking action on three proposals to help stimulate our economy and create jobs.
1) Idaho has one of the highest corporate income tax rates in the country. As a first step, let's lower our individual and corporate income tax rate from 7.4 percent to 7.3 percent this year by passing H548. Not only will starting, and continuing, tax rate reduction make Idaho more competitive with our neighboring states that boast low rates, but it's a way for us to support our existing businesses and the taxpayers they employ. This bill will mean additional money in everyone's pocket.
This proposal is responsible in its application, as the rate reduction does not take effect until Idaho General Fund revenue growth exceeds 3 percent, or at least $84.2 million, above the previous year's totals. This check ensures Idaho's economy will be strong and growing before any income tax rate reduction is allowed.
At a cost of $21 million, the minimum net state tax revenue increase will be more than $63 million. The additional revenue can then be used by the Legislature to finance other pressing needs, such as education.
This proposal is simple, responsible tax policy. It requires a strong economy before it provides tax relief. Everyone who pays income tax will benefit, businesses are able to invest in production and create jobs, and the state economy grows from increased consumer spending and business growth.
2) Before the end of this session, Idaho lawmakers have an opportunity to further incentivize existing Idaho companies to expand within our state, as well as to incentivize new companies to move to Idaho. Idaho Department of Commerce Director Jeff Sayer's Tax Reimbursement Incentive Legislation, HB 546, would create high-paying jobs, diversify Idaho's economy, and expand the state's tax base. The legislation would create a new performance-based economic development tool that provides a tax credit of up to 30 percent for up to 15 years on new corporate income tax, sales tax and payroll taxes paid as a result of a new qualifying project.
A similar provision in Utah is credited with expanding its payroll base by $22 billion since the incentive's inception. If approved by the Senate and signed by the governor, this bill would encourage new business opportunities and create sought-after, high-paying jobs.
3) The chamber has been a longtime proponent of the elimination of the personal property tax. Last year, the Legislature exempted the first $100,000 of business equipment from the tax, but more than 6,500 businesses across the state are still left paying.
We must continue to make progress on this tax's elimination until no company is burdened by the onerous reporting requirement and unfair application. Furthermore, once the tax is fully eliminated, Idaho can expect a boost to the economy through increased wages and new employment opportunities in excess of $800 million.
The chamber understands that the legislative session is extremely busy and filled with competing priorities. But, before legislators go home, they should consider these three measures. Let's finish the session with jobs and economic growth.
Bill Connors is president and CEO of Boise Metro Chamber of Commerce