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Idaho - PP Tax Déjà Vu

by Chris Wilson, Dallas, January 2013

 

Idaho's personal property tax is difficult for local governments to administer and it's difficult for businesses to comply with, according to the Idaho Association of Commerce and Industry.

 

A new push for repeal of the personal property tax is on the agenda for the 2013 legislative session.

 

Not a New Idea

 

This isn't the first time that the idea of repealing business personal property taxes has been addressed in Idaho.

 

In 2008, the Legislature passed a measure to exempt the first $100,000 of business personal property, eliminating the tax for about 83% of all businesses. However, House Bill 599 never took effect. It required a 4% growth in state revenues over 2008 levels and that threshold has not been met.

 

Support for Repeal

 

Senate Pro Tem Brent Hill told the Boise Metro Chamber of Commerce he believes the 2013 Legislature will vote to phase out personal property taxes.

 

"Personal property tax is the worst kind of tax," Hill said. "I think everybody wants to get rid of it. It's a matter now of who pays for it." Hill advocates having the state replace the revenue collected by local governments over a six-year period.

 

Gov. Butch Otter also says he supports repeal of the tax, but he hasn't been specific about the details.

 

Opposition

 

Meanwhile, many cities and counties are adamant that personal property taxes should stay.

 

Some taxing districts rely heavily on personal property taxes, while others take in very little. The amount depends on the kind of industry that exists within a district. For example, personal property taxes account for 45% of the tax base in Caribou County, but only 7% in Ada County.

 

Opponents are concerned that a repeal could cause a serious lack of funding for necessarily public services if the state is unable to make up the difference.