On a party-line vote, the House Revenue & Taxation Committee this morning agreed to introduce legislation to expand the personal property tax exemption for business equipment from $100,000 per taxpayer per county to $250,000, at a cost to the state of about $8.7 million a year. Local taxing districts would be reimbursed for the lost property tax revenue at a fixed rate based on 2012 values; the bill would take effect for the 2015 calendar year, meaning the reimbursement would start in fiscal year 2016, not next year.
The measure also clarifies which property is considered real property and which is considered personal property for purposes of the tax exemption, following the guidelines the state Tax Commission set in a rule it approved before this year’s legislative session. “This bill basically codifies Rule 205,” House Majority Leader Mike Moyle, R-Star, told the committee. That “will be controversial,” he said. “We’ll hear about it in the hearing.” Amid much pushback from business interests, the Tax Commission bill clarified that the exemption lawmakers approved last year (at $100,000 per taxpayer per county) doesn’t apply to pipelines, underground storage tanks, cell phone towers, railroad tracks and the like, as they are considered real property.
The bill also includes a table of percentages to establish how divisions between personal and real property will be set for centrally assessed property taxpayers, which mainly are regulated utilities and railroads. That table of percentages was advocated for by the Idaho Association of Commerce and Industry.
Moyle said, “The goal is to ultimately end the tax for everybody.” Supplying the percentages, he said, “gives us a number to shoot at” to do that in the future. That, however, would cost the state more than $100 million a year; it’s not accomplished by this bill. “That’ll be the fight between the House and the Senate,” Moyle said. Senate Tax Chairman Jeff Siddoway, R-Terreton, has been pushing for repealing the tax entirely; last year’s exemption eliminated it entirely for the vast majority of Idaho businesses.
All three of the committee’s Democrats, Reps. Grant Burgoyne, Mat Erpelding and Caroline Meline, voted against introducing the bill; it's co-sponsored by Moyle and House Speaker Scott Bedke, R-Oakley.