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Friday, July 19, 2019  Spokane, Washington  Est. May 19, 1883
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News >  Idaho

Tax break coaxes airline to consider Boise

BOISE – A new tax break is credited with coaxing an airline to build a Boise maintenance facility with the promise of 100 new jobs.

The company, which will be named on Tuesday, is the first to apply for the state’s new economic reimbursement incentive. The tax break refunds up to 30 percent of a company’s state corporate income, sales and payroll taxes for up to 15 years if they create specified numbers of new Idaho jobs.

“I think people will be pleased when they hear the name of the company,” said Idaho Commerce Director Jeff Sayer. “We’ll be announcing whether or not the proposal is approved. And then there may be a subsequent announcement later, we’re hoping, in this particular case, where the company will be announcing they’ve actually chosen Idaho.”

The jobs would offer salaries of about $50,000 a year.

The tax incentive law took effect July 1. It offers the tax breaks to companies that create at least 20 new jobs in rural areas or at least 50 in urban areas, if the jobs pay at least the county average wage. It’s available both to existing Idaho businesses and to out-of-state companies; Sayer said the first applicant is coming from out of state.

“We’re among the final states that they’re looking at, and they’ve asked us to fast-track this particular process so that they can make their decision and get going,” he said. “If they choose Boise, it’ll be a huge win for our aerospace industry sector and the airport and Boise all at the same time, so we’re hopeful.”

Though the new law has been on the books less than two months, Sayer said the state already has had half a dozen companies apply for it, though this is the only one to reach the final application stage. “I think the state’s going to see this incentive become very popular very quickly,” he said.

The incentive raised questions when lawmakers debated it this year. It had to be reworked after the attorney general’s office pointed out constitutional problems including letting the seven-member Idaho Economic Advisory Council hand out the incentives at its discretion with no appeal process. The final version of the bill includes an appeal process and rules governing how much incentive should be granted.

“We’re putting a lot of work into how we calibrate the quality of the projects with the incentives we’re handing out,” Sayer said. “Not every deal is going to be a 30 percent deal.” The first applicant applied for the full 30 percent but will be offered something “lower than that,” he said.

Some proposals won’t qualify for rebates on all three of the taxes, depending on the type of business and project, he said.

“This first one will involve new jobs, new construction, and it’ll be for several years,” Sayer said. “So this one is a really good project right from out of the chute.”

Sayer modeled the proposal after a Utah program; he said Idaho’s lack of this type of incentive was a disadvantage in negotiations with professional site selectors who negotiate with states on behalf of companies looking to relocate or expand. Now, he said, he’s hearing from site selectors around the nation. “They are telling us they would never have considered putting Idaho on their list, and now they are,” Sayer said.

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