The Senate has suspended its rules this morning to immediately take up and pass a bill, HB 77, the annual conformity bill that conforms Idaho’s state tax code to the current version of the federal internal revenue code. Sen. Brent Hill, R-Rexburg, said, “Here we are on Feb. 16 – this is about as late as I remember doing this.” He said the delay, which caused uncertainty for tax preparers and filers, came because Congress made late changes to extend some provisions.

The bill shows a $17 million fiscal hit to the state general fund, but Hill said that’s really just a matter of timing. A provision allowing Section 179 deductions for businesses that purchase equipment in a single year, rather than over a multi-year depreciation schedule, was scheduled to drop from a maximum of $500,000 a year to $25,000 this year if Congress hadn’t extended it, but it did. Even without the extension, the same equipment would have been depreciated, Hill said; it just would have occurred over multiple years rather than in a single year.

“These pieces of equipment would be deducted anyway, either immediately or over time, so it is not a complete loss of revenues like many fiscal impacts we would see,” Hill told the Senate. “Actually we will receive more income in later years.” The Senate voted unanimously, 33-0, in favor of the bill, sending it to Gov. Butch Otter’s desk. The bill earlier passed the House 59-10.

There, objections were raised because the measure makes no change in the existing law that says, “For all purposes of the Idaho income tax act, a marriage must be one that is considered valid or recognized under section 28, article III, of the constitution of the state of Idaho and defined in section 32-201, Idaho Code, 19 or as recognized under section 32-209, Idaho Code.” That’s the now-invalidated clause that forced married same-sex couples to file separately in Idaho, because the state banned gay marriage, even though they could file jointly on their federal taxes.

Mike Chakarun, tax policy manager for the Idaho State Tax Commission, said that language “is not currently operative because of the 9^th Circuit Court decision,” overturning Idaho’s ban on same-sex marriage and making those marriages legal in Idaho. So married same-sex couples in Idaho can now file their state taxes jointly, just as they do their federal taxes. The state is currently appealing the 9^th Circuit ruling to the U.S. Supreme Court. Chakarun said, “If the Supreme Court rules in favor of the 9^th Circuit, then that code section will be taken out … in some future bill.”