Tax exemption reform gets cool reception

BOISE – After six months’ study of Idaho’s huge array of tax exemptions, the first run at actually repealing any hit a brick wall Thursday in the House Revenue & Taxation Committee.

That’s the committee where all tax legislation starts, so prospects for reform of Idaho’s jumble of exemptions aren’t looking good.

State Rep. George Sayler, D-Coeur d’Alene, called the results “disappointing.” The committee, on which he’s one of five Democrats, “sent a clear message today they weren’t willing to look at the exemptions,” Sayler said. “I was of the mind that we need to look at them. Exemptions are not free.”

The value of Idaho’s exemptions from the sales tax total more than its sales tax collections, and the number of exemptions and credits from all Idaho taxes grows each year. Over the summer, a committee with members from both the House and Senate tax committees pored over Idaho’s existing exemptions, developed standards to evaluate them against and broke them into three “tiers” for review.

House Tax Chairman Dennis Lake, R-Blackfoot, picked six proposals from the first-priority tier to propose to his committee Thursday. The committee voted against even introducing five of the six bills. The only one it agreed to was a technical one on vending machine sales.

State Rep. Lenore Barrett, R-Challis, said, “I’m frankly tired of the state out there looking for pockets to pick. The one issue that we never deal with that would solve a lot of these issues is to cut spending.”

Added state Rep. Ken Roberts, R-Donnelly: “I’m not opposed to looking at tax exemptions. … I have a problem picking out a few. … If we’re going to do this, we oughta sunset all exemptions and have all of ‘em come back in and make their case.”

But Sayler said that’s been proposed in the past and has “never gone anywhere.” Sayler said he backed introducing the bills so the beneficiaries of the exemptions and the public could testify about whether they’re warranted.

The five rejected bills would have repealed exemptions for some publishers, snowmaking and snow grooming equipment at ski resorts, funeral caskets, vending machines, and auto manufacturer rebates.

State Rep. Dick Harwood, R-St. Maries, voted against all the bills, and made the motion to kill the one regarding funeral caskets.

“It ain’t like buying a luxury car, y’know?” he said. “It’s something that is in a time of crisis, I guess you’d say. They just don’t need to hear that the state wants their fair share at that point.” Harwood said he also opposed taking away the ski resort break because ski resorts operate just a few months of the year and are a tourist draw. Lake said he had planned to propose several more exemption repeals to his committee, but was rethinking that after Thursday’s votes.

Senate Tax Chairman Brent Hill, R-Rexburg, said, “I was hoping that the House committee would spend some time evaluating them … have those who are benefiting re-justify it, which in some cases hasn’t been done for 20 years.”

But, he said. “The criteria we came up with will still be very valuable in evaluating future exemptions and credits as they come up.”