Tax talk increasing in Boise

A handful of taxing bills are bubbling as they move toward the front burner of the 2021 legislative session.

They include bills on urban renewal agencies, taxing districts and even lemonade stands. 

Carried by Republican Sen. Mary Souza of Coeur d'Alene, soon-to-be bill RS28307C1 was inspired by concerns she developed over the Health Corridor urban renewal district. 

"True to the typical, the Coeur d'Alene urban renewal plan was very vague, so it was really hard to understand what the plan entailed," Souza told the Press. "I've asked the city and looked at the plans, but they are going to need to reroute traffic and extend into a lot of property."

She described RS28307C1 as a voter accountability bill, which would require unelected urban renewal agency officials to receive approval from elected officials before using the power of eminent domain. 

"I don't know if the agency is going to need to use the power, but there are several people worried about their personal properties that I know of in the area of concern," Souza said. 

Under Idaho Code, urban renewal boards can be put up for voter election. However, Souza said she does not know of any that are. 

"If they are not publicly elected, then they can only advise or recommend the use of that power with local governments," she said. "Then the publicly elected on the city council or commission would be the ones to make the decision."

Souza introduced the same bill last year, making it swiftly out of the Senate committee and floor only to be stopped short by the COVID-19 shutdown. RS28307C1 is the first piece of legislation Souza has brought forth this year, and she expects it will receive the approval of her colleagues with ease. 

"There are always questions because people want to understand the bill, but I don't think there will be any problems," she said. 

PROPERTY TAXES

Another piece of legislation that Souza pointed to was an upcoming bill in the Senate carried by Sen. Jim Rice and supported by North Idaho legislator Rep. Jim Addis, R-Coeur d'Alene. The bill had initially been on the agenda after Souza's presentation but was pulled for correction. 

From the legal description, the bill would change the cap on property tax budgets to prevent excessive increases on citizens during a period of rapid growth and skyrocketing assessment values — much like Kootenai County has seen.

Per the last revised text, there would be no impact on local districts' general funds. Still, local budgets would be limited during periods of rapidly increasing assessed value and high growth. 

"We need to hear from the cities, counties, and citizens and then decide on the bill," said Souza, a member of the Local Government and Tax Committee. "We need to take some action to protect people from the ever-rising property taxes." 

She recognizes that in North Idaho, property taxes have been of particular concern, but she has also seen the effects down in the Treasure Valley.

On a call with the Idaho Building Contractors Association and North Idaho Building Contractors Association, members told legislators that the inventory of ready-to-sell homes in North Idaho was budgeted to last less than a month.

"That just drives prices up, especially when people are coming in from other states and they have a pocket full of cash from the house they sold," Souza said. 

LEMONADE STAND

Nicknamed the Lemonade Stand Freedom Bill, Rep. Ron Nate, R-Rexburg, presented House Bill 21. HB 21 would exempt young business owners from state sales tax and from needing to pay for any operational licenses, permits, or associated fees. 

"Most minors wouldn't realize they would be required to get business licenses or permission slips from the city," Nate said. "We want to encourage young entrepreneurs to dip their toes into the business arena and learn how to own and operate a business. We don't want to put any more roadblocks in their way."

The bill's provisions would be limited to what Nate described as "occasional" businesses exclusively operated by youth under 18 years of age. If approved, the legislation would amend Idaho Code § 50-307 relating to permits and Idaho Code § 63-3622K regarding sales tax collection. 

"Most young business owners might work many hours on a Saturday to earn $5 to $20," Nate said. "Asking them to spend $50 or $100 even to get a permit might discourage them." 

Other interesting tax legislation that has been brought forth this session are:

• RS28138: Stemming from the State Tax Commission and carried by Rep. Dustin Manwaring, R-Pocatello, the legislation would allow large partnerships (over 100 members) who have incorrectly reported their tax liability to enter into a settlement with the IRS — avoid the time and expense of a traditional audit. The state of Idaho would also accept the payment without having to undergo a full audit.

• House Bill 14: Presented by Hayden Rep. Doug Okuniewicz brings Idaho Code up to date with the Federal Bankruptcy Statute and makes Idaho municipalities subject to federal regulations.

• RS28115: Carried by Rep. Ben Adams, the legislation brought forward by the State Tax Commission would potentially require non-native businesses that operate in Idaho to pay additional costs for sales conducted within the state. The fiscal impact is still uncertain for the state. However, upcoming committee meetings should provide more conversation.

• RS28116: Introduced by Rep. Von Ehlinger would allow lower-income homeowners to deduct $4,000 from their property taxes for medical expenses under the circuit breaker exemption.