Lawmakers: Idaho biz tax cut may be dead

Lawmakers: Idaho biz tax cut may be dead

	Published : Fri, 16 Mar 2007 18:37 By : Agencies Print this Story

BOISE, Idaho (AP) - Senate lawmakers say that a plan to eventually slash as much as $100 million in taxes on business equipment has likely failed this session because its repeal should be part of a broader discussion of Idaho's complicated system of tax breaks.

The Senate Local Government and Taxation Committee voted 5-4 Thursday to amend the bill, without saying how.

With just a week left in the session, even proponents say there's likely not enough time for changes.

Businesses such as J.R. Simplot, the agriculture giant, and Tablerock Brewpub & Grill in Boise had been demanding a repeal of the personal property tax, saying it's hard to calculate and stunts economic growth.

The House had passed the bill 47-20 last Friday.

Still, a majority on the Senate committee -- three Republicans and two Democrats -- said the plan needs changes that won't come quickly.

'I'm very doubtful -- extremely doubtful -- we have got time left in the Legislature to attempt any amendments,' said Sen. Joe Stegner, R-Lewiston, who voted with the majority. 'My prediction is, there will not be any attempt to modify it' this session.

Sen. Brent Hill, R-Rexburg and the faltering proposal's sponsor, and Stegner both said an interim House and Senate tax committee, set to analyze more than $1.6 billion in sales tax exemptions and other tax breaks for Idaho businesses and organizations, will likely take up this issue as well during the summer.

Hill suggested lawmakers may have to consider eliminating some business tax breaks, such as a production equipment tax exemption that's worth about $88 million annually, or a $40 million investment tax credit, to help pay for revenue lost to local governments if the personal property tax is repealed.

'We may have to look at some things that might help fund this,' Hill said.

The bill has already been changed several times since it was introduced last month. Originally, it called for phasing out the entire tax by 2016.

The plan the Senate panel considered Thursday called for exempting personal property -- including everything from office staplers to fork lifts -- worth as much as $50,000 starting this year, with the $9.4 million cost shifted to other taxpayers, including homeowners.

Starting in 2008, it would have allowed future legislatures to decide whether to dump the remaining tax, worth up to $92 million a year.

Democrats had objected, saying it was a windfall for business.

The Idaho Association of Commerce and Industry championed the plan, and the association president, Alex LaBeau, told committee members Thursday that passage of this year's proposal would be a good beginning.

LaBeau said repealing the tax on the first $50,000 worth of personal property would remove the burden from more than four-fifths of Idaho companies.

GOP lawmakers including Stegner, Sen. Tim Corder, R-Mountain Home, and Sen. Lee Heinrich, R-Cascade, all said they agreed the personal property tax should be repealed.

Still, they want to look at Idaho's broader tax landscape before doing it.

'Maybe there's a way to do away with the entire personal property tax next year,' said Heinrich, after the vote. 'We don't have the answers to all the questions to make me comfortable with this (bill).'

House lawmakers, meanwhile, said they aren't giving up hope that the bill will be revived in 2007.

'There was broad support for doing something with personal property tax this year,' said Rep. Dennis Lake, R-Blackfoot and chairman of the House Revenue and Taxation Committee. 'If we don't do anything now, it will have to be a major part of' this summer's interim committee.