A handful of new tax and spending bills are making their way through the Legislature this week. Here’s an update of what’s happening and what we’re watching.
A bill to reduce the income and corporate tax rates of Idaho’s top earners got an initial nod of approval from the House tax committee. The Spokesman Review blog ‘Eye On Boise’ reports HB 563 passed by a 13-4 vote.
The bill aims to cut the top individual income tax rate from 7.8 percent to 7.4 percent and the top corporate rate from 7.6 percent to 7.4 percent. It would cost the state an estimated $35.7 million in 2013.
‘Eye On Boise’ blogger Betsy Russell reports the measure is co-sponsored by 40 of the House’s 70 members. Democratic Rep. John Rusche opposes the idea:
“This proposal violates some of my principles. I don’t think it’s responsible to cut taxes when we can’t meet the current needs,” said Rusche – Eye On Boise
Idaho’s Department of Commerce Director Jeff Sayer said having a lower tax rate helps the state attract new business.
“The message this would send to the nation is significant. This legislation would allow us to step forward and announce to the world that not only is Idaho financially solvent and fiscally sound, but we just reduced our taxes.” – Eye On Boise
At the start of the session, Governor C.L. “Butch” Otter suggested lawmakers budget to allow $45 million worth of tax cuts, but he didn’t detail instructions on how to do that.
A bill that would give companies specializing in aircraft maintenance and repair a tax break on parts installed in Idaho, into out-of-state planes, is headed to the governor’s desk. House Bill 417 passed both chambers unanimously.
A measure introduced today is aimed at boosting farm jobs. Capital Press reports the “Value-Added Agriculture and Farmer Empowerment Act” would give Idaho farmers an income tax credit of up to $500,000 for adding processing capability.
“The Value-Added Agriculture and Farmer Empowerment Act would allow any producer who invests in new value-added processing capacity to receive 30 percent of their investment as a tax credit, with a cap of $500,000. They would receive the credit in the form of 50 percent of their tax liability for up to 14 years.” – CapitalPress.com
Online Sales Tax
Tomorrow morning, the House Revenue and Taxation Committee will hear House Bill 581, the streamlined sales tax bill. The measure would ensure all Idahoans are paying the state’s 6 percent sales tax on Internet purchases.
The hearing begins at 8:00 am. You can watch the meeting here.