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Eye On Boise

A few would gain a lot…

Under HB 599, the proposed repeal of the personal property tax on business equipment, 18 percent of the 53,718 Idaho businesses that now pay the tax would get 95 percent of the benefit, which translates to slightly over $110 million in tax relief for 9,887 of the companies. Of that, nearly $30 million would go to utilities. This is according to state Tax Commission data. Alex LaBeau, president of the Idaho Association of Commerce and Industry, the business lobbying group that proposed HB 599, said, “They’re paying it.” If a small portion of Idaho’s businesses are paying 95 percent of the tax, he said, it’s only fair that they get 95 percent of the benefit from the bill. “I wonder how many people they employ,” LaBeau said. “This is an onerous tax whether you’re small or big. … It’s universally despised.”

LaBeau said he wasn’t surprised that nearly all the testimony at a four-hour Senate committee hearing on the bill this week was opposed to the bill, but it passed anyway. County commissioners, city officials, school superintendents and more from across the state flocked to the hearing to object to the bill, while just a handful of business lobbyists favored it. “I wasn’t surprised by that – it came down to a fundamental philosophical difference,” LaBeau said. “Those that are advocating to get rid of the tax were those that pay it. Recipients of the tax don’t want it to go away.”

Rep. George Eskridge, R-Dover, co-chairman of an interim legislative committee on energy, said he’s opposed to the bill because of concerns about how the break for utilities will play out. “When we go through rulemaking, we’re going to see the big problems, specifically caused by the power lines, towers, cable, underground gas lines – those are going to be defined as personal property,” Eskridge said. “That’s going to be a bigger hit than we anticipate. My concern is we’re not going to be able to afford the services we need and we’re going to see a tax shift. It’s just too big a hit.” Utilities, he said, are “not going to cut the rates” because they get the tax cut. “If you’re a property taxpayer, you have no option.” The bill could come up for a final vote in the Senate as soon as today.

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Eye On Boise

News, happenings and more from the Idaho Legislature and the state capital.