Idaho Counties Introduce Expanded Business Tax Exemption Plan

Molly Messick / StateImpact Idaho

Seth Grigg of the Idaho Association of Counties presented the new bill this afternoon.

A new personal property tax bill from the Idaho Association of Counties was introduced in the House Ways & Means Committee Monday afternoon. This bill broadens the business personal property tax exemptions that would be granted under the Association of Counties’ existing bill, which was introduced the week before last.

The new bill would exempt items with an acquisition price of $3,000 or less from the tax on business equipment and machinery. It would also exempt the first $100,000 of business personal property from taxation for all businesses in the state. That means operating property owners, like railroads and public utilities, could now claim the exemption.

Finally, the new bill would simplify the records keeping process for county assessors and small businesses. The 90 percent of businesses that are expected to pay no personal property tax if the $100,000 exemption is approved would file an application with their county assessor once every five years, instead of annually.

The bill has an estimated yearly cost of $20 million, since lost local tax revenue would be replaced from the state general fund.

This is the third business personal property tax bill introduced during the 2013 legislative session. The House Revenue and Taxation Committee last week held a public hearing on the two existing bills, one from the Idaho Association of Counties, and the other from the Idaho Association of Commerce and Industry (IACI).

IACI, a lobbying group that represents many of Idaho’s largest businesses, favors eliminating the tax between now and 2019. That proposal reportedly has the support of Gov. C.L. “Butch” Otter.  Meanwhile, longtime Capitol-watchers say the fact that the Idaho Association of Counties’ second bill was introduced in the Ways & Means Committee indicates it has the backing of House Speaker Scott Bedke (R-Oakley).

The House Revenue and Taxation Committee will hear the Idaho Association of Counties’ new bill Tuesday at 7:30 a.m.