The Greek yogurt maker Chobani says it will hire at least 400 people and invest $100 million in its new manufacturing plant in Twin Falls, Idaho.
The Times-Newsreports city officials and local and state economic development leaders brokered a deal behind closed doors to lure the New York-based company to the region. The newspaper reports the efforts started in May when Chobani’s parent company, Agro Farma, contacted the Southern Idaho Economic Development Organization. Continue Reading →
We here at StateImpact have been trying to get a sense of the potential local impact of the expansion of a federal mortgage refinancing program, announced last week. The program is intended to allow underwater borrowers to refinance, but only if they are up-to-date on their payments, and only if Fannie Mae or Freddie Mac acquired the loan before June 2009.
Nicolas Asfouri / Getty Images
Twenty-three percent of all mortgaged properties in Idaho were underwater at the end of June, according to the most recent negative equity report from financial data firm CoreLogic. Finding out what percentage of those homeowners are current on their payments and might be able to take advantage of the new program is more difficult. Until the lender sends a notice of default or begins the foreclosure process, that information is between the borrower and the lender.  “I want to know this answer more than you do,” said Mark Lebowitz, Executive Officer of the Ada County Association of Realtors. Continue Reading →
Michael Mazerov is a Senior Fellow with the State Fiscal Project at The Center on Budget and Policy Priorities. I contacted the center to discuss the potential shortfalls of Idaho tax incentive programs after coming across this article.
The Center on Budget and Policy Priorities is a non-partisan research and policy institute which works at the federal and state levels on fiscal policy and public programs that affect low and moderate income families and individuals.
Q: How do state tax incentives work?
A: There’s a wide variety of incentives that state governments and local governments use to try and attract new businesses or encourage businesses that are already in the state to expand their investment or job creation. Basically, a tax that a state imposes on a business could theoretically have an incentive added to it. At the state level the most common kinds of incentives are reductions in the state corporate income tax based on increasing investment or increasing the number of employees a company has or increase the amount of R & D in the state. Some states have credits or reductions in the state corporate income tax if the company moves its headquarters to a state. But, they all basically involve cutting a tax in exchange for doing something the state thinks will benefit its economy.
Q: Does the state end up losing money?
A: Certainly, when the state first grants the credit, they’re definitely reducing the revenue from the tax that they’re allowing the break on. What they’re doing is hoping that in the long run what they’re doing will generate enough economic activity as a result of the credit that the economic activity will recoup some of the revenue lost that they initially lost by granting the credit. Continue Reading →
Idaho’s Division of Financial Management (DFM) released its latest economic forecast today and the news is gloomy. The probably of slipping back into a national recession is higher than it was just three months ago. “In the previous (July) forecast, the probability of the economy slipping into a recession was 25 percent,” says Derek Santos, chief economist. “The probability of a recession was raised to 40 percent in the current forecast.”
Santos writes the state’s economic recovery stalled more than expected this last spring and summer. Advancements in job creation are now predicted to be slower through 2014. For example, Idaho’s non-farm employment was forecast to grow two percent in the second quarter of this year, but it didn’t.
“The economic recovery had its second anniversary this summer”, says Santos. “Instead of being a milestone to celebrate what has been achieved, it served as a reminder of how much more is to be accomplished. The economy should be further along the road to recovery than it is.” Continue Reading →
Idaho’s most popular tax incentive is the three percent investment tax credit. Businesses that purchase qualifying new equipment can earn an income tax credit. The credit can offset up to half of a company’s state income tax liability and can be carried forward up to 14 years.
Dan John manages tax policy at the Idaho State Tax Commission. “So, if you have $100 of computed tax liability, even if you have $1,000 worth of credit, you could only claim $50 of the credit against that liability.”
Whatever is left over can be used for the next 14 years. Plus, this credit isn’t a one-time deal. John says companies that are ‘capital intensive’, like manufacturers, use this credit all the time on qualified purchases. Continue Reading →
The Commerce Department’s website lists 18 different business incentive programs. Many of them are broad and open to any industry. Some are very specific, like the Idaho Film Incentives, which offers discounted lodging and sales tax rebates for media production companies, among other things.
We’ll look at some of Idaho’s most popular tax incentive programs over the next few days and try to answer a few questions. How do they work? Who uses them? What’s the tradeoff that the state is choosing to make when it forgoes tax revenue to spur investment?
And, we want to hear from you. Does your business use tax credits to grow? Are you skeptical of the growth touted through incentives? Share your thoughts throughout the week in the comment thread.
Home owners met with a Bank of America negotiator last summer, in hopes of restructuring a mortgage loan.
Bank of America is the bank mentioned in our recent story about lenders suing homeowners for the amount of the mortgage that remains after a foreclosure, but it may be that smaller banks are more likely than large ones to pursue what are called deficiency claims.
Terri Pickens, an attorney with Pickens Law in Boise, has come to that conclusion, based on her experience representing clients who have been served with deficiency judgments. “The small banks pursue everything,” she said. “I have not seen Bank of America pursue them. In my clients’ cases, whether it was a modest house to a multimillion dollar house, they haven’t gone after the deficiency.” Attorney Brian Webb of Angstman Johnson agrees with Pickens’ analysis. Continue Reading →
Take another look at the five stories that got the most clicks this week (it sure got Mugsy-the-dog’s attention)…
In the Wake of Foreclosure, a Debt That Won’t Die: Ben and Lori Jensen thought after they lost their home to foreclosure the ordeal would be over, instead they were sued for the remainder of their home loan. Molly Messick explains why more deficiency judgements are being filed.
Idaho Forest Group Buys Lewiston Sawmill: A Coeur d’Alene company is buying the Clearwater Paper sawmill in Lewiston for $30 million. 250 people will lose their jobs, it’s not clear how many of them will be hired back, or when. Continue Reading →
The Idaho Business Review is reporting north Idaho lawmaker Phil Hart is being sued for nearly $550,000 in unpaid income taxes, penalties and interest. The U.S. government is asking Idaho’s federal district court to sign off on foreclosing some of Hart’s property in Kootenai County.
Hart is a Republican from Hayden, Idaho. He’s serving his fifth term in the Idaho Legislature. IBR.com reports Hart also has a state tax lawsuit awaiting trail in the Idaho Supreme Court.
“He’s also faced ethics hearings in the Legislature, though he avoided a vote after stepping down from the vice chairman position of an Idaho House committee.” – Idaho Business Review
The Idaho Business Review says this latest lawsuit is based on income tax assessments from 1996 to 2008.
“Hart has been a tax protestor, claiming that the government can’t constitutionally collect taxes on his wages, since at least the mid 1990s. He’s gone to court over his federal taxes, including an unsuccessful appeal to the U.S. Supreme Court. On a personal website, Hart and his supporters have claimed that he’s paid his taxes since 1997 and that his tax protesting is a fight for freedom.” – Idaho Business Review
At the St. Vincent de Paul food pantry, shelves are emptied by the end of a busy day.
StateImpact Idaho is in the early stages of creating a series about unemployment and underemployment in the state. More specifically, we want to find Idahoans who are willing to talk with us every month or so about how they’re coping through economic circumstances that are uncertain, at best.
In the course of making calls to prepare for this series, I was invited to spend some time at the St. Vincent de Paul food pantry here in Boise. It was a busy day there this Wednesday, with nearly 60 families picking up carts of free food. At least one woman was a first-time visitor. She came in, looking a little uncertain, and said to the nearest volunteer, “Somebody said this was a good place to come for food…” Continue Reading →
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