Idaho bill to eliminate most property taxes for homeowners is dead, Senate GOP says
A bill that would eliminate most property taxes and increase Idaho’s sales tax is dead, for now.
The legislation would have eliminated most property taxes levied on those who qualify for the homeowners exemption, and reduce property taxes by an estimated 65% to 70%, Sen. Jim Rice, who introduced the bill, told a legislative committee earlier this month. It would leave in place voter-approved bonds and school levies.
In a Senate GOP news release, Republican senators said they need to “analyze the impact these changes will have,” but are “running out of time” this session. Lawmakers hope to end the session in the coming weeks.
“Instead, it will be the tool needed to continue the conversation so that all voices are heard, all numbers are analyzed, all models are perfected, and all concerns are given thoughtful consideration,” the news release said.
To offset the reduction in property tax revenues, the bill would have increased Idaho’s sales tax to 7.85%, from the current 6% rate. That would’ve made Idaho’s sales tax the highest in the nation, surpassing California’s 7.25% rate, according to the Sales Tax Institute, a Chicago-based consulting firm.
The proposal drew skepticism and opposition from lawmakers, local government officials and analysts. They said the shift to an increased sales tax could harm renters, and local governments would be subjected to the whims of fluctuating sales tax revenues.
“There’s not a municipality around that thinks it’s a good idea,” Joe Borton, a Meridian City Council member, previously told the Idaho Statesman.
The House Revenue and Taxation Committee introduced the bill last week, but the legislation won’t advance to a hearing.
Senate GOP leadership — President Pro Tem Chuck Winder, of Boise, Majority Leader Kelly Anthon, of Burley, Assistant Majority Leader Abby Lee, of Fruitland, and Majority Caucus Chair Mark Harris, of Soda Springs — said they will search for a long-term property tax solution in the meantime.
“This is the beginning of making major improvements to the tax structure of our state,” they said in the release. “Our focus is, and remains, the financial well-being of the people we represent. There is a lot to learn about any property tax reduction bill.”
This story was originally published March 11, 2022 at 1:34 PM.
