Eye On Boise

Personal property tax repeal would mean big bucks to some of the state's largest companies

Alex LaBeau, president of the Idaho Association of Commerce and Industry, sits in the Capitol in Boise Thursday, Feb. 28, 2013 where he’s trying to convince lawmakers to repeal the state’s century-old personal property tax on business equipment. Gov. C.L. “Butch” Otter has made repeal a priority of the 2013 session, but an initial draft proposal circulated among lawmakers got unfavorable treatment from counties, cities and public school officials. LaBeau is helping Otter’s administration with a new draft. (AP/Idaho Press-Tribune / Adam Eschbach)
Alex LaBeau, president of the Idaho Association of Commerce and Industry, sits in the Capitol in Boise Thursday, Feb. 28, 2013 where he’s trying to convince lawmakers to repeal the state’s century-old personal property tax on business equipment. Gov. C.L. “Butch” Otter has made repeal a priority of the 2013 session, but an initial draft proposal circulated among lawmakers got unfavorable treatment from counties, cities and public school officials. LaBeau is helping Otter’s administration with a new draft. (AP/Idaho Press-Tribune / Adam Eschbach)

No bill has even been introduced yet to repeal Idaho’s $141 million-a-year personal property tax on business equipment, the AP reports, but one potential beneficiary aims to kick-start debate by putting its tax savings where its mouth is. CenturyLink Inc., one of the state’s top 10 personal property taxpayers, would invest up to $2 million in tax savings in Idaho’s broadband infrastructure above the company’s existing plans if repeal succeeds, Ed Lodge, the Monroe, La.-based company’s lobbyist in Boise, told the Associated Press.

The biggest potential beneficiaries of the repeal of the tax would start with Idaho Power Co., Idaho’s biggest utility, at No. 1 with roughly $10 million to $15 million annually, according to state estimates. Union Pacific Railroad is No. 2 at $5.4 million, while agricultural giant Simplot Industries and semiconductor maker Micron Technology Inc. pay some $3.3 million each. The bill for PacifiCorp’s Rocky Mountain unit equals about $3.1 million annually, followed by Century Link at $2.9 million; three gas-related companies, including Intermountain Gas Co. in Boise, pay about $1 million each. You can read AP reporter John Miller's full report here at spokesman.com. Miller reports that Otter's initial draft proposal has received little support in the Legislature due to concerns from local governments and schools, but the administration is working on a revamped plan said to include $130 million in state replacement money over seven years.

Meanwhile, Twin Falls Times-News reporter Melissa Davlin connects the dots and reports that those companies that stand to benefit most from a personal property tax repeal have contributed thousands of dollars to the political action committee of the organization pushing hardest for repeal legislation, IACI. Those include Micron, Potlatch, Idahoan Foods LLC, Hecla Mining, Idaho Forest Group, Basic American Foods, Clearwater Paper, and Simplot. Click below for her full report.

Top IACI PAC Contributors Would Benefit Most from Personal Property Tax Repeal

By Melissa Davlin
mdavlin@magicvalley.com


BOISE • Those who stand to benefit most from a personal property tax repeal have contributed thousands of dollars to the political action committee of the organization pushing hardest for repeal legislation.
 

Several of the businesses that donated to the Idaho Association of Commerce and Industry political action committee are the top personal property tax payers in their respective counties, but IACI says the donations are unrelated to the policy making goals of the organization.
 

Though contributions and membership fees paid to IACI itself aren’t public, donations to its political action committee are. Of the businesses that donated, eight paid the most in personal property tax in one or more counties in 2011, according to data published by StateImpact. Those include Micron, Potlatch, Idahoan Foods LLC, Hecla Mining, Idaho Forest Group, Basic American Foods, Clearwater Paper, and Simplot.
 

Each of those eight companies contributed at least $3,500 to IACI’s PAC, the Idaho Prosperity Fund, in 2012. Micron contributed the most, paying a total of $20,500 to the fund last year.
 

The money in the Prosperity Fund pays for mailers on behalf of candidates and community teleconferences with voters. During the 2012 primary election, the Prosperity Fund sent out fliers on behalf of 18 candidates, all of whom won.
 

Alex LaBeau, executive director of the Idaho Association of Commerce and Industry and political treasurer for the Idaho Prosperity Fund, said though there might be a correlation between the donors to the Prosperity Fund and the top personal property tax payers, that doesn’t necessarily equal causation.

The personal property tax repeal has been something IACI studied for years, LaBeau pointed out, and this isn’t the first time the Legislature considered a repeal. In 2008, the Legislature enacted a personal property tax repeal for personal property assessments less than $100,000. That repeal would go into effect only if the state’s budget grows 5 percent in one year — something that hasn’t happened since the law passed.


But that 2008 repeal would provide only a partial benefit for the state’s largest companies.
 

The eight contributors to the Prosperity Fund who paid the most personal property tax in their counties all paid more than $100,000 — meaning they would still have to pay, even after the exemption in the event of that 5 percent growth.
 

Though they would benefit from a total repeal, some companies are hesitant to voice support. Most companies contacted declined to comment.


Bob Boeh, vice president of government affairs for the Idaho Forest Group, said the group is waiting for an actual bill to come up before taking a position on repeal. The company’s main concern: Lost revenue for local taxing districts.
 

“We want to make sure that the counties and cities are made whole by any provision before we would support it,” Boeh said.
 

Boeh added that the Prosperity Fund donation is an annual contribution for the company.
 

Idaho Forest Group is the top personal property tax payer in Boundary, Kootenai and Idaho counties.
LaBeau said though there is widespread support for personal property tax repeal among IACI members, not all companies are approaching the repeal proposal the same way.
 

“I think it's businesses want to make sure that the services that are provided in their communities are going to be OK, and are taking a very responsible approach to eliminating the tax over the long haul,” LaBeau said.
 

Though most of the donors to the Prosperity Fund are large companies, LaBeau said smaller companies contribute to and become members of IACI.
 

“Whether you're big and storied or small and starting out, it's a tax that everyone hates,” LaBeau said.

 




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Betsy Z. Russell




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