Updated: Lawmakers Get Behind Partial Repeal Of Idaho’s Personal Property Tax

Updated: The House will debate a personal property tax bill, HB 315, at 3:30 this afternoon, according to reports. The bill was introduced yesterday in the House Ways & Means Committee and won unanimous support in the House Revenue and Taxation Committee this morning.

A personal property tax bill supported by the Idaho Association of Counties and introduced Monday in the House Ways & Means Committee won unanimous approval in the House Revenue and Taxation Committee this morning.

Molly Messick / StateImpact Idaho

Seth Grigg of the Idaho Association of Counties presented the personal property tax legislation to the House Revenue and Taxation Committee.

Revenue and Taxation Chairman Gary Collins (R-Nampa) said after the vote he believes this bill can win the Legislature’s support this session.

“We have tried to come up with something that we felt could make it through both bodies, and hopefully the governor will sign,” Collins said. “Depending on whose figures you look at, almost 90 percent of the businesses will be relieved of the personal property tax, and I see that as a very good thing.” 

The personal property tax discussion has been one of the Legislature’s most watched this year, as the Idaho Association of Counties, which represents the interests of local government, and the Idaho Association of Commerce and Industry (IACI), which represents many of the state’s largest businesses, proposed competing legislation.

IACI favored eliminating the tax between now and 2019 at a cost of as much as $120 million annually to the state general fund. The Idaho Association of Counties’ proposal, voted out of the Revenue and Taxation Committee this morning, partially repeals the tax at an estimated annual cost of $20 million. The bill establishes an exemption for items with an acquisition price of $3,000 or less. It also exempts the first $100,000 worth of business equipment and machinery owned by every business in the state in each of its counties of operation.

Moreover, the bill satisfies the Idaho Association of Counties’ broader aim of protecting local tax revenue. Idaho’s business personal property tax generates $140 million annually for local government and taxing districts.

Speaking in favor of the Idaho Association of Counties’ proposal this morning, Rep. Stephen Hartgen (R-Twin Falls) referenced the winding road lawmakers and lobbyists have followed in arriving at a bill. “For those who are writing master’s papers on the legislative process, this would certainly be a great one on the sausage-making process of legislation,” he observed.

The Idaho Association of Commerce and Industry’s Alex LaBeau was quick to say he doesn’t agree with where lawmakers have wound up. “I think it should be interesting to note that not a single taxpayer testified on the legislation, only tax collectors and spenders,” he said. “They were claiming it was compromise. I don’t know with whom.”

LaBeau also said the push to eliminate the tax doesn’t end this session. “This won’t be the last time we deal with the issue,” he predicted. “This will not go away until we finish it.”

For now, though, the consensus appears to be HB 315 or nothing.  “At this point in the legislative session, this is it,” Chairman Collins said.