A fast-tracked bill that would repeal the personal property tax for nearly 90 percent of Idaho businesses passed the House 67-2 the same day it was unanimously pushed through committee. Representatives Shirley Ringo (D-Latah) and John Gannon (D-Boise) cast the only votes against the measure.
Rep. Gannon said he couldn’t support the bill because $20 million in state general fund dollars will now be used to pay for the forgone tax revenue, money Gannon says should instead be used to fund schools.
“The voters have repeatedly said they want the public schools supported,” Gannon said. He referenced the 36 of 41 public school levies approved by voters earlier this month, which will collectively increase property tax collections by more than $100 million. “Yet, we seem to be going in the opposite direction in this body because we’re reducing general fund revenue by $20 million, making it that much more difficult to adequately fund public schools,” said Gannon.
The personal property tax bill would exempt the first $100,000 worth of business equipment and machinery owned by each business in every county of operation. According to 2011 Idaho Tax Commission data, that means 47,451 businesses would no longer pay the tax, while 5,775 companies would still pay.
The bill would also exempt the first $100,000 worth of personal property for operating property owners, like railroads and public utilities.
The House debated the proposal for about 35 minutes. Most lawmakers agreed the bill isn’t perfect. Some would like to see the tax entirely eliminated. Others say the bill goes too far since lawmakers won’t be creating new tax revenue.
“This could be an economic driver for our state,” Rep. Gary Collins (R-Nampa) said as he wrapped up debate on the plan. “It’s a good step forward. I for one believe it is a step, and hopefully, eventually, it will lead to other things.”