HOUSE BILL NO. 387
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H0387...............................................by REVENUE AND TAXATION
LIMITED LIABILITY COMPANY - Amends existing law to clarify that property of
a religious limited liability company or a fraternal, benevolent, or
charitable limited liability company is exempt from taxation.
01/23 House intro - 1st rdg - to printing
01/24 Rpt prt - to Rev/Tax
01/28 Rpt out - rec d/p - to 2nd rdg
01/29 2nd rdg - to 3rd rdg
02/04 3rd rdg - PASSED - 66-1-3
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chavez, Chew,
Clark, Collins, Crane, Durst, Hagedorn, Hart, Harwood, Henbest,
Henderson, Jaquet, Killen, King, Kren, Labrador, Lake, LeFavour,
Loertscher, Luker, Mathews, McGeachin, Mortimer, Nielsen, Nonini,
Pasley-Stuart, Patrick, Pence, Raybould, Ringo, Roberts, Ruchti,
Rusche, Sayler, Schaefer, Shepherd(02), Shepherd(08), Shirley,
Shively, Smith(30), Smith(24), Snodgrass, Stevenson, Thayn, Thomas,
Trail, Vander Woude, Wills, Wood(27), Wood(35), Mr. Speaker
NAYS -- Marriott
Absent and excused -- Chadderdon, Eskridge, Moyle
Floor Sponsor - Killen
Title apvd - to Senate
02/05 Senate intro - 1st rdg - to Loc Gov
02/13 Rpt out - rec d/p - to 2nd rdg
02/14 2nd rdg - to 3rd rdg
02/25 3rd rdg - PASSED - 33-0-2
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Corder, Darrington, Davis, Fulcher, Geddes, Goedde, Hammond,
Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
Malepeai(Sagness), McGee, McKague, McKenzie, Pearce, Richardson,
Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- Coiner, Gannon
Floor Sponsor - Werk
Title apvd - to House
02/26 To enrol
02/27 Rpt enrol - Sp signed
02/28 Pres signed
02/29 To Governor
03/03 Governor signed
Session Law Chapter 50
Effective: 01/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature Second Regular Session - 2008
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 387
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY EXEMPT FROM TAXATION; AMENDING SECTION 63-602B, IDAHO
3 CODE, TO CLARIFY THAT PROPERTY OF A RELIGIOUS LIMITED LIABILITY COMPANY IS
4 EXEMPT FROM TAXATION; AMENDING SECTION 63-602C, IDAHO CODE, TO CLARIFY
5 THAT PROPERTY OF A FRATERNAL, BENEVOLENT OR CHARITABLE LIMITED LIABILITY
6 COMPANY IS EXEMPT FROM TAXATION; DECLARING AN EMERGENCY AND PROVIDING A
7 RETROACTIVE EFFECTIVE DATE.
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. That Section 63-602B, Idaho Code, be, and the same is hereby
10 amended to read as follows:
11 63-602B. PROPERTY EXEMPT FROM TAXATION -- RELIGIOUS LIMITED LIABILITY
12 COMPANIES, CORPORATIONS OR SOCIETIES. (1) The following property is exempt
13 from taxation: property belonging to any religious limited liability company,
14 corporation or society of this state, used exclusively for and in connection
15 with any combination of religious, educational, or recreational purposes or
16 activities of such religious limited liability company, corporation or soci-
17 ety, including any and all residences used for or in furtherance of such pur-
18 poses.
19 (2) If the entirety of any property belonging to any such religious lim-
20 ited liability company, corporation or society is leased by such owner, or if
21 such religious limited liability company, corporation or society uses the
22 entirety of such property for business or commercial purposes from which a
23 revenue is derived, then the same shall be assessed and taxed as any other
24 property. If any such property is leased in part or used in part by such reli-
25 gious limited liability company, corporation or society for such business or
26 commercial purposes, the assessor shall determine the value of the entire
27 exempt property, and the value of the part used or leased for such business or
28 commercial purposes, and that part used or leased for such business or commer-
29 cial purposes shall be taxed as any other property. The Idaho state tax com-
30 mission shall promulgate rules establishing a method of determining the value
31 of the part used or leased for such business or commercial purposes. If the
32 value of the part used or leased for such business or commercial purposes is
33 determined to be three percent (3%) or less of the value of the entirety, the
34 whole of said property shall remain exempt. If the value of the part used or
35 leased for such business or commercial purposes is determined to be more than
36 three percent (3%) of the value of the entirety, the assessor shall assess
37 such proportionate part of such property, and shall assess the trade fixtures
38 used in connection with the sale of all merchandise for such business or com-
39 mercial purposes, provided however, that the use or lease of any property by
40 any such religious limited liability company, corporation or society for ath-
41 letic or recreational facilities, residence halls or dormitories, meeting
42 rooms or halls, auditoriums, or club rooms for and in connection with the pur-
43 poses for which such religious limited liability company, corporation or soci-
2
1 ety is organized, shall not be deemed a business or commercial purpose, even
2 though fees or charges be imposed and revenue derived therefrom.
3 SECTION 2. That Section 63-602C, Idaho Code, be, and the same is hereby
4 amended to read as follows:
5 63-602C. PROPERTY EXEMPT FROM TAXATION -- FRATERNAL, BENEVOLENT, OR CHAR-
6 ITABLE LIMITED LIABILITY COMPANIES, CORPORATIONS OR SOCIETIES. The following
7 property is exempt from taxation: property belonging to any fraternal, benevo-
8 lent, or charitable limited liability company, corporation or society, the
9 World War veteran organization buildings and memorials of this state, used
10 exclusively for the purposes for which such limited liability company, corpo-
11 ration or society is organized; provided, that if any building or property
12 belonging to any such limited liability company, corporation or society is
13 leased by such owner or if such limited liability company, corporation or
14 society uses such property for business purposes from which a revenue is
15 derived which, in the case of a charitable organization, is not directly
16 related to the charitable purposes for which such charitable organization
17 exists, then the same shall be assessed and taxed as any other property, and
18 if any such property is leased in part or used in part by such limited liabil-
19 ity company, corporation or society for such purposes the assessor shall
20 determine the value of the entire building and the value of the part used or
21 leased for commercial purposes. If the value of the part used for commercial
22 purposes is determined to be three percent (3%) or less than the value of the
23 entirety, the whole of said property shall remain exempt. If the value of the
24 part used for commercial purposes is determined to be more than three percent
25 (3%) of the value of the entirety, the assessor shall assess such proportion-
26 ate part of such building including the value of the real estate as is so
27 leased or used for such purposes, and shall assess the trade fixtures used in
28 connection with the sale of all merchandise; provided however, that the lease
29 or use of any property by any such limited liability company, corporation or
30 society for athletic or recreational facilities, residence halls or dormito-
31 ries, meeting rooms or halls, auditoriums or club rooms within the purposes
32 for which such limited liability company, corporation or society is organized,
33 shall not be deemed a business or commercial purpose, even though fees or
34 charges be imposed and revenue derived therefrom.
35 SECTION 3. An emergency existing therefor, which emergency is hereby
36 declared to exist, this act shall be in full force and effect on and after its
37 passage and approval, and retroactively to January 1, 2008.
STATEMENT OF PURPOSE
RS 17669
This legislation enables certain religious, charitable, or
fraternal organizations to utilize the property tax exemptions
presently codified in Idaho law. The existing language in
Sections 63-602B and 63-602C establishes the criteria by which an
entity qualifies for such exemptions, but limits the class of
eligible entities to either a "...corporation or society..." In
1994, Idaho adopted the Limited Liability Company Act (LLC).
Since then, this entity form has become an increasingly popular
choice for both business and non-profit organizations, including
religious, fraternal and benevolent bodies. Local Assessors
presently do not grant exemption requests from otherwise
qualified LLCs. The proposed legislation extends to qualified
LLCs the benefits of these exemptions.
FISCAL NOTE
No fiscal impact to the general fund.
Contact
Name: Rep. Bill Killen Senator Elliot Werk
Phone: 345-2956
STATEMENT OF PURPOSE/FISCAL NOTE H 387