Talk of lowering taxes has already started among Idaho lawmakers. At the Associated Taxpayers Conference earlier this month, legislative leaders said proposals to lower Idaho’s corporate tax and individual income tax rates will be part of the discussion.
Sen. Brent Hill (R-Rexburg) says lowering taxes this session will be met with resistance, and will likely require a trade-off in order to pass muster. “If we lower the tax rate, for small businesses as well as corporations, I think you’ll see we’ll have to phase out the investment credit at the same time we lower the rate,” says Hill.
Governor Butch Otter says the state needs to be bringing in more revenue before it can consider lowering tax rates. And if a tax decrease is agreed upon, it would need to happen over a period of time, the governor says.
The governor was more tight lipped when it comes to the tax incentive side. Otter’s Hire One Act, which passed last session in an effort to create jobs, is set to expire at the end of 2012.
Q: Do you intend to try and extend Hire One?
A: I think what we’ll do is look at our experience and see what kind of progress we made with that incentive. And if it’s generating the kind of activity and income that we were looking for. Even by extending it, it might be a net wash. We’ll just have to see what that experience is, and in many cases we won’t know that until April 15th.
Q: Are you working on other incentive proposals?
A: There are some, but those will be covered in the State of the State (January 9th).
Lawmakers could also be faced with proposals to increase taxes. Rep. Dennis Lake (R-Blackfoot) is considering bringing a bill that would increase Idaho’s tobacco tax.