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H0241...............................................by REVENUE AND TAXATION
HOMEOWNER'S EXEMPTION - Amends existing law to increase the maximum amount
of the fifty-fifty homeowner's exemption; and to allow twenty percent of
the market value for assessment purposes of land included in a homestead to
be exempt as long as the total exemption for the residential improvement
and land shall not exceed seventy thousand dollars of market value for
assessment purposes.
02/17 House intro - 1st rdg - to printing
02/18 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature First Regular Session - 2005
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 241
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY EXEMPT FROM TAXATION; AMENDING SECTION 63-602G, IDAHO
3 CODE, TO INCREASE THE MAXIMUM AMOUNT OF THE FIFTY-FIFTY HOMEOWNER'S EXEMP-
4 TION AND TO ALLOW TWENTY PERCENT OF THE MARKET VALUE FOR ASSESSMENT PUR-
5 POSES OF LAND INCLUDED IN A HOMESTEAD TO BE EXEMPT FROM TAXATION AS LONG
6 AS THE TOTAL EXEMPTION FOR THE RESIDENTIAL IMPROVEMENT AND LAND SHALL NOT
7 EXCEED SEVENTY THOUSAND DOLLARS OF MARKET VALUE FOR ASSESSMENT PURPOSES;
8 DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 63-602G, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 63-602G. PROPERTY EXEMPT FROM TAXATION -- RESIDENTIAL IMPROVEMENTS AND
13 LAND. (1) During the tax year 1983 2005 and each year thereafter, the first
14 fifty seventy thousand dollars ($570,000) of the market value for assessment
15 purposes of residential improvements, or fifty percent (50%) of the market
16 value for assessment purposes of residential improvements, whichever is the
17 lesser, shall be exempt from property taxation.
18 (2) The exemption allowed by this section may be granted only if:
19 (a) The residential improvements are owner-occupied and used as the pri-
20 mary dwelling place of the owner as of January 1, provided that in the
21 event the residential improvements are owner-occupied after January 1 but
22 before April 15, the owner of the property is entitled to the exemption.
23 The residential improvements may consist of part of a multidwelling or
24 multipurpose building and shall include all of such dwelling or building
25 except any portion used exclusively for anything other than the primary
26 dwelling of the owner. The presence of an office in an owner-occupied res-
27 idential property, which office is used for multiple purposes, including
28 business and personal use, shall not prevent the owner from claiming the
29 exemption provided in this section; and
30 (b) The tax commission has certified to the board of county commissioners
31 that all properties in the county which are subject to appraisal by the
32 county assessor have, in fact, been appraised uniformly so as to secure a
33 just valuation for all property within the county; and
34 (c) The owner has certified to the county assessor by April 15 that:
35 (i) He is making application for the exemption allowed by this sec-
36 tion;
37 (ii) That the residential improvements are his primary dwelling
38 place; and
39 (iii) That he has not made application in any other county for the
40 exemption, and has not made application for the exemption on any
41 other residential improvements in the county.
42 (d) For the purpose of this section, the definition of owner shall be the
43 same definition set forth in section 63-701(7), Idaho Code.
2
1 When an "owner," pursuant to the provisions of section 63-701(7),
2 Idaho Code, is any person who is the beneficiary of a revocable or irrevo-
3 cable trust, or who is a partner of a limited partnership, a member of a
4 limited liability company, or shareholder of a corporation, he or she may
5 provide proof of the trust, limited partnership, limited liability com-
6 pany, or corporation in the manner set forth in section 63-703(4), Idaho
7 Code.
8 (e) Any owner may request in writing the return of all copies of any doc-
9 uments submitted with the affidavit set forth in section 63-703(4), Idaho
10 Code, that are held by a county assessor, and the copies shall be returned
11 by the county assessor upon submission of the affidavit in proper form.
12 (f) For the purpose of this section, the definition of "primary dwelling
13 place" shall be the same definition set forth in section 63-701(8), Idaho
14 Code.
15 (g) For the purpose of this section, the definition of "occupied" shall
16 be the same definition set forth in section 63-701(6), Idaho Code.
17 (3) An owner need only make application for the exemption described in
18 subsection (1) of this section once, as long as all of the following condi-
19 tions are met:
20 (a) The owner has received the exemption during the previous year as a
21 result of his making a valid application as defined in subsection (2)(c)
22 of this section.
23 (b) The owner or beneficiary, partner, member or shareholder, as appro-
24 priate, still occupies the same residential improvements for which the
25 owner made application.
26 (c) The residential improvements described in subsection (3)(b) of this
27 section are owner-occupied or occupied by a beneficiary, partner, member
28 or shareholder, as appropriate, and used as the primary dwelling place of
29 the owner or beneficiary, partner, member or shareholder, as appropriate,
30 as of January 1; provided however, that in the event the residential
31 improvements are owner-occupied after January 1, but before April 15, the
32 owner of the property is entitled to the exemption.
33 (4) The exemption allowed by this section must be taken before the reduc-
34 tion in taxes provided by sections 63-701 through 63-710, Idaho Code, is
35 applied.
36 (5) Recovery of property tax exemptions allowed by this section but
37 improperly claimed or approved.
38 (a) Upon discovery of evidence, facts or circumstances indicating any
39 exemption allowed by this section was improperly claimed or approved, the
40 county assessor shall decide whether the exemption claimed should be
41 allowed and if not, notify the taxpayer in writing, assess a recovery of
42 property tax and notify the county treasurer of this assessment.
43 (b) When information indicating that an improper claim for the exemption
44 allowed by this section is discovered by the state tax commission, the
45 state tax commission may disclose this information to the appropriate
46 county assessor, board of county commissioners and county treasurer.
47 Information disclosed to county officials by the state tax commission
48 under this subsection may be used to decide the validity of any entitle-
49 ment to the exemption provided in this section and is not otherwise sub-
50 ject to public disclosure pursuant to chapter 3, title 9, Idaho Code.
51 (c) The assessment and collection of the recovery of property tax must
52 begin within the seven (7) year period beginning the date the assessment
53 notice reflecting the improperly claimed or approved exemption was
54 required to be mailed to the taxpayer.
55 (d) The taxpayer may appeal to the board of county commissioners the
3
1 decision by the county assessor to assess the recovery of property tax
2 within thirty (30) days of the date the county assessor sent the notice to
3 the taxpayer pursuant to this section.
4 (e) A recovery of property tax shall be for each year the exemption
5 allowed by this section was improperly claimed or approved up to the
6 lesser of a maximum of seven (7) years or until the property was trans-
7 ferred to a bona fide purchaser for value. The amount of the recovery of
8 property tax shall be calculated using the product of the amount of
9 exempted value for each year multiplied by the levy for that year plus
10 costs, late charges and interest for each year at the rates equal to those
11 provided for delinquent property taxes during that year.
12 (f) Any recovery of property tax shall be due and payable no later than
13 the date provided for property taxes in section 63-903, Idaho Code, and if
14 not timely paid, late charges and interest, beginning the first day of
15 January in the year following the year the county assessor sent the notice
16 to the taxpayer pursuant to this section, shall be calculated at the cur-
17 rent rate provided for property taxes.
18 (g) Recovered property taxes shall be billed, collected and distributed
19 in the same manner as property taxes, except each taxing district or unit
20 shall be notified of the amount of any recovered property taxes included
21 in any distribution.
22 (h) Any unpaid recovered property taxes shall become a lien upon the real
23 property in the same manner as provided for property taxes in section
24 63-206, Idaho Code, except such lien shall attach as of the first day of
25 January in the year following the year the county assessor sent the notice
26 to the taxpayer pursuant to this section.
27 (i) For purposes of the limitation provided by section 63-802, Idaho
28 Code, moneys received pursuant to this subsection as recovery of property
29 tax shall be treated as property tax revenue.
30 (6) The legislature declares that this exemption is necessary and just.
31 (7) Residential improvements having previously qualified for exemption
32 under this section in the preceding year, shall not lose such qualification
33 due to the owner's, beneficiary's, partner's, member's or shareholder's
34 absence in the current year by reason of active military service in a desig-
35 nated combat zone, as defined in section 112 of the Internal Revenue Code. If
36 an owner fails to timely apply for exemption as required in this section
37 solely by reason of active duty in a designated combat zone by the owner, ben-
38 eficiary, partner, member or shareholder, as appropriate, as defined in sec-
39 tion 112 of the Internal Revenue Code, and such improvements would have other-
40 wise qualified under this section, then the board of county commissioners of
41 the county in which the residential improvements are located shall refund
42 property taxes, if previously paid, in an amount equal to the exemption which
43 would otherwise have applied.
44 (8) Twenty percent (20%) of the market value for assessment purposes of
45 land included in a homestead as defined in section 63-701, Idaho Code, when
46 the residential improvement portion of which qualifies for exemption pursuant
47 to this section, shall be exempt from property tax; provided however, that the
48 total exemption for both the residential improvement and land shall not exceed
49 seventy thousand dollars ($70,000) of market value for assessment purposes.
50 SECTION 2. An emergency existing therefor, which emergency is hereby
51 declared to exist, this act shall be in full force and effect on and after its
52 passage and approval, and retroactively to January 1, 2005.
STATEMENT OF PURPOSE
RS 14856
This legislation increases the homeowner's exemption value limit
from $50,000 to $70,000, while retaining the 50% of market value
cap. The exemption may also include up to 20% of the residential
land value. A portion of land value is included to prevent a
shift to the low value improvement owner who would not otherwise
realize a benefit.
FISCAL NOTE
This amount of new exempt value will have the following effects:
1. Total taxes shifted the first year will be about $23.7
million.
2. During the second year and each year thereafter, schools will
lose $11.4 million in M&O property tax revenue.
3. On the average, eligible homeowners will see about $73 each in
property tax reduction.
Contact:
Name: Representative Wendy Jaquet
Phone: 332-1133
Name: Senator Clint Stennett
Phone: 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 241