The Idaho House voted 67-2 on Tuesday to eliminate the personal property tax for about 90 percent of Idaho businesses, favoring a plan by counties over a broader industry proposal that lawmakers decided was too expensive.
The proposal exempts businesses’ first $100,000 worth of computers, tables, chairs and other personal property from taxation. Purchases up to $3,000 would be exempt from future taxes, while the bill would also streamline the process by requiring reports just once every five years, instead of annually.
House Majority Leader Mike Moyle said the move prepares Idaho for eventually eliminating the entire $141 million personal property tax, something many Republicans believe will stimulate Idaho’s economy and attract investment.
Democrats – including House Minority Leader John Rusche of Lewiston – said the bill would get rid of a record-keeping headache for most small- and medium-sized businesses.
The measure was crafted by the Idaho Association of Counties, which has been competing against a more expansive, $120 million alternative floated by the Idaho Association of Commerce and Industry.
Counties eventually won affordability grounds.
Local governments would see roughly $20 million in annual tax revenue lost through the county version replaced with future sales tax revenue. Gov. Butch Otter has already set aside $20 million in his fiscal year 2014 budget for the revenue replacement. (AP)