Rathdrum homeowner prevails in tax appeal

COEUR d’ALENE — The case of a Rathdrum man who prevailed in an occupancy tax appeal hearing Wednesday highlighted how Kootenai County handles proration required by Idaho law.

When Kyle Ward went before the Kootenai County Board of Equalization, it wasn’t to dispute the assessed value of his newly built Rathdrum home or the land on which it sits. Rather, he disputed an occupancy tax he believed had been unfairly applied. 

“It feels like a win for the little guy in a way,” he said after the hearing. “It feels like we keep getting squeezed for more and more money. It’s important for me to come here and set the record straight when things aren’t right.” 

Under Idaho law, the occupancy tax for all newly constructed residential, commercial and industrial structures is to be “prorated for the portion of the year for which the structure was occupied.” 

Ward’s family moved into the home Oct. 27 of last year, establishing occupancy, but when he received his property tax notice, he saw that he had been taxed for three full months of occupancy, beginning Oct. 1. 

During Wednesday’s hearing, deputy assessor Dyson Savage said his office’s computer system cannot calculate a daily or weekly proration. Occupancy must be entered into the system as if it began on the first of the month, even if the office’s data indicates that occupancy was established on a later date in the same month, Savage said. 

“There is no proration schedule given in statute,” Savage said. “It does not say to prorate daily. It does not say to prorate weekly. ... This portion of the statute isn’t defined. It isn’t stated anywhere how to do it, which kind of leaves it up to the assessor.” 

Kootenai County Assessor Bèla Kovacs said his office is limited by the constraints of the software it uses. 

“I would prefer that it be prorated on a daily basis,” he said. 

It may be possible to update the software used by the Assessor’s Office to allow for daily proration, Kovacs said, but the county would have to consider “whether the juice is worth the squeeze.” 

“The programming that it would take to do this might not be worth the effort at this point,” Kovacs said. 

Commissioners Bill Brooks and Leslie Duncan ultimately directed the Assessor’s Office to manually prorate the occupancy tax on Ward’s property for the month of October 2024, based on the Oct. 27 occupancy date. 

“I don’t like that the system doesn’t take (the actual occupancy date) into account,” Brooks said. “There’s no one in this room whose fault that is. But now that we have identified a problem, we should work to correct it.” 

Ward said the occupancy tax for the full month of October amounted to a few hundred dollars, but he didn’t appeal just to save the money. 

“It’s more about the principle of the matter,” he said. “I’m not against paying for the time I occupy my home. I want to pay what’s fair.” 

He said he was unsatisfied by the assessor’s suggestion that the problem he encountered is so uncommon that it isn’t worth fixing. 

“For him to say that is, in a way, offensive to the taxpayer,” Ward said. “That’s not fair.”