Business Property Tax Bill Surfaces At The Idaho Legislature

Emilie Ritter Saunders / StateImpact

Thirty-nine days into Idaho’s legislative session, there has yet to be a bill or any public debate over eliminating the business personal property tax. That could soon change.

Chairman of the House Revenue and Tax Committee Gary Collins (R-Nampa) says a bill draft relating to the personal property tax exists, but he won’t divulge details of the proposal.

“There are those that think that’s the path we need to go,” says Collins. “I would say right at this time, there are probably more that say that isn’t the path to go.”

The path he’s referring to is the content of the draft proposal. Collins says the life of the bill depends heavily on the budgeting number that’s expected to be set by the Joint Finance Appropriations Committee tomorrow or early next week.

“There are a lot of things being moved in the background that have to tie into it,” he says. “Tomorrow will be a little bit of a bellwether when JFAC sets their target budget.”

Late last year, before the start of the legislative session, Collins was pessimistic about a full repeal of the tax on business property. That tax creates about $140 million in revenue for counties and local government each year.

Back in December Collins said, “I’m in favor of taking as much of the personal property tax off as we possibly can.” But added, “If we’re talking about $140 million, the budget has been dramatically reduced over the last couple of years, so there is not $140 million that could be put out to replace the whole thing in the counties.”

Collins says this first bill draft has been an effort among lawmakers and the governor’s office. Gov. C.L. “Butch” Otter has suggested a $20 million offset to replace some of the tax dollars lost if the business property tax is repealed. Otter has also alluded to a phase-out approach, instead of nixing the tax in one fell swoop.

“We have to go along with what the governor said initially,” Collins says. “If we did it [repeal] we’d try to do no harm. He said ‘no harm’, it wasn’t ‘least amount of harm’. That’s something we need to look at.”

Earlier today, the Spokesman Review reported Senate Local Government and Taxation Committee Chairman Jeff Siddoway (R-Terreton) said discussions over repealing the tax were “alive, but not well.” Siddoway agrees any plan to get rid of the tax would likely need to take a phase-out approach.

The governor’s office has also confirmed there is a bill draft in the works, but wouldn’t elaborate on the details of the proposal. Gov. Otter’s spokesman Jon Hanian says they’ve been having “ongoing discussions” with key lawmakers. Hanian doesn’t know when the bill will be formally introduced, “All I can say is, when it’s ready.”

Collins can’t predict the outcome of the proposal in the works, or subsequent ideas. But he does want a conversation about how to get rid of the tax on businesses.

“I think we probably will have something to at least discuss this year. I don’t know that it will get done this year,” says Collins.