Gov. C.L. “Butch” Otter today signed a bill to partially repeal Idaho’s business personal property tax, calling it “a good and important start toward the goal of eliminating the personal property tax in Idaho.”
In his letter to the Legislature the governor urges lawmakers to take the issue up again, and do away with the tax altogether.
The tax on business equipment and machinery generates approximately $140 million annually for local government and taxing districts. The Idaho Association of Commerce and Industry (IACI) has for years pushed for its full repeal, an aim Gov. Otter endorsed in his State of the State address in January.
Lawmakers, however, were ultimately persuaded that eliminating the tax would deal too severe a blow to counties and taxing districts. Many also doubted the wisdom of committing more than $100 million annually in general fund revenue to replacing counties’ forgone tax dollars, as the plan put forth by IACI would have dictated.
The Legislature passed, nearly unanimously, a bill backed by the Idaho Association of Counties that exempts the first $100,000 worth of business personal property owned by every business in Idaho in every county of operation.
Here’s the full letter:
Dear Mr. Speaker,
I hereby advise you that I have transmitted to the Office of the Secretary of State, with my approval, the following House bill, to wit:
within the time prescribed by law, the same having arrived in the Office of the Governor at the hour of 8:30 a.m. on March 29, 2013.
This legislation is a good and important start toward the goal of eliminating the personal property tax in Idaho. However, it is only a start, and I would strongly encourage the Legislature to continue the work of relieving all Idaho businesses of this burdensome and onerous tax. It is my sincere hope that the Legislature will revisit the issue in the interest of further stimulating our economy and creating more career opportunities for our citizens.
For now, please accept my thanks for working through a complex and potentially divisive issue and for delivery this legislation to my desk. It is welcome relief for most Idaho businesses.
As always — Idaho, “Esto Perpetua”
C.L. “Butch” Otter
Governor of Idaho