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H0233...............................................by REVENUE AND TAXATION
PERSONAL PROPERTY TAX - Amends and adds to existing law to provide a
partial exemption from taxation for personal property; to provide a
phased-in reduction for personal property taxation; to provide for deferral
of the phase-in under certain circumstances; to provide that certain taxes
are not affected by personal property exemptions and reductions; to provide
for reimbursement to local governments and urban renewal agencies of
personal property tax; and to provide for deferral of reimbursement under
certain circumstances.
02/26 House intro - 1st rdg - to printing
02/27 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 233
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAXATION OF PERSONAL PROPERTY; AMENDING CHAPTER 6, TITLE 63, IDAHO
3 CODE, BY THE ADDITION OF NEW SECTIONS 63-607, 63-608, 63-609, 63-610 AND
4 63-611, IDAHO CODE, TO PROVIDE A PARTIAL EXEMPTION FROM TAXATION FOR PER-
5 SONAL PROPERTY, TO PROVIDE A PHASED-IN REDUCTION FOR PERSONAL PROPERTY
6 TAXATION, TO PROVIDE FOR DEFERRAL OF THE PHASE-IN UNDER CERTAIN CIRCUM-
7 STANCES, TO PROVIDE TAXES THAT ARE NOT AFFECTED BY PERSONAL PROPERTY
8 EXEMPTIONS AND REDUCTIONS, TO PROVIDE FOR REIMBURSEMENT OF PERSONAL PROP-
9 ERTY TAX TO LOCAL GOVERNMENTS AND URBAN RENEWAL AGENCIES, TO PROVIDE FOR
10 DEFERRAL OF REIMBURSEMENT UNDER CERTAIN CIRCUMSTANCES, TO PROVIDE PROCE-
11 DURES AND TO PROVIDE ADMINISTRATIVE RULES; AMENDING SECTION 63-201, IDAHO
12 CODE, TO REVISE DEFINITIONS; AMENDING SECTION 63-304, IDAHO CODE, TO PRO-
13 VIDE FOR COLLECTION OF DELINQUENT PROPERTY TAXES FOR A MANUFACTURED HOME,
14 MOBILE HOME OR MODULAR BUILDING THAT MAY CONSTITUTE REAL PROPERTY IF CER-
15 TAIN CIRCUMSTANCES OCCUR; AMENDING SECTION 63-309, IDAHO CODE, TO PROVIDE
16 THAT IMPROVEMENTS ON CERTAIN PROPERTY SHALL BE ASSESSED AND TAXED AS REAL
17 PROPERTY AND TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION 63-313,
18 IDAHO CODE, TO PROVIDE THAT FOR TRANSIENT PERSONAL PROPERTY VALUED AT OVER
19 FIFTY THOUSAND DOLLARS, ANY EXEMPTION TO THE TAXPAYER SHALL BE ALLOCATED
20 BETWEEN COUNTIES BASED ON THE PRORATED VALUE; AMENDING SECTION 63-316,
21 IDAHO CODE, TO PROVIDE CORRECT CODE REFERENCES; AMENDING CHAPTER 4, TITLE
22 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 63-412, IDAHO CODE, TO
23 PROVIDE FOR SUBMISSION TO THE STATE TAX COMMISSION OF A STATEMENT IDENTI-
24 FYING PERSONAL PROPERTY UPON WHICH THE TAXPAYER CLAIMS AN EXEMPTION;
25 AMENDING SECTION 63-3638, IDAHO CODE, TO PROVIDE FOR DISTRIBUTION OF SALES
26 TAX MONEYS TO COUNTIES, URBAN RENEWAL AGENCIES AND OTHER TAXING DISTRICTS
27 FOR REPLACEMENT OF PROPERTY TAX ON PERSONAL PROPERTY TAX REDUCTIONS AND TO
28 PROVIDE CORRECT CODE REFERENCES; PROVIDING SEVERABILITY; DECLARING AN
29 EMERGENCY, PROVIDING RETROACTIVE APPLICATION AND PROVIDING EFFECTIVE
30 DATES.
31 Be It Enacted by the Legislature of the State of Idaho:
32 SECTION 1. That Chapter 6, Title 63, Idaho Code, be, and the same is
33 hereby amended by the addition thereto of NEW SECTIONS, to be known and desig-
34 nated as Sections 63-607, 63-608, 63-609, 63-610 and 63-611, Idaho Code, and
35 to read as follows:
36 63-607. PARTIAL EXEMPTION FOR PERSONAL PROPERTY. On and after January 1,
37 2007, each taxpayer's personal property, located in a county, which is not
38 otherwise exempt shall be exempt to the extent of fifty thousand dollars
39 ($50,000). For purposes of this section, a taxpayer includes two (2) or more
40 individuals using the property in a common enterprise or a related group of
41 two (2) or more organizations when the individuals or organizations are within
42 a relationship described in section 267 of the Internal Revenue Code, as
43 defined in section 63-3004, Idaho Code.
2
1 63-608. PERSONAL PROPERTY TAX REDUCTION. (1) During each calendar year
2 provided in this section, the amount of property tax on each taxpayer's per-
3 sonal property subject to taxation shall be uniformly reduced by the following
4 amounts:
5 2008 12.5%
6 2009 25.0%
7 2010 37.5%
8 2011 50.0%
9 2012 62.5%
10 2013 75.0%
11 2014 87.5%
12 2015 100%
13 (2) In the event that actual revenue in a particular fiscal year falls
14 short of the budgeted amount, the scheduled increase in the personal property
15 tax reduction specified in subsection (1) of this section for that same calen-
16 dar year shall be deferred by one (1) year, and all subsequent scheduled
17 increases in the personal property tax reduction shall be deferred by one (1)
18 year.
19 (3) Beginning on January 1 of the year following the final year of prop-
20 erty tax reduction provided in subsection (1) of this section, including any
21 deferral resulting from the provisions of subsection (2) of this section, all
22 personal property shall be exempt from taxation. However, this section shall
23 not prohibit the collection of any taxes levied prior to January 1 of the year
24 after the final year of property tax reduction provided in subsection (1) of
25 this section on personal property subject to assessment and taxation before
26 that date.
27 63-609. TAXES NOT AFFECTED BY PERSONAL PROPERTY EXEMPTIONS AND REDUC-
28 TIONS. Nothing in section 63-607 or 63-608, Idaho Code, shall affect the taxa-
29 tion of forest lands or forest products pursuant to chapter 17, title 63,
30 Idaho Code, or the taxation of net profits of mines pursuant to chapter 28,
31 title 63, Idaho Code.
32 63-610. REIMBURSEMENT TO LOCAL GOVERNMENTS OF PERSONAL PROPERTY TAX. (1)
33 No later than the third Monday of November of each year, the county clerk of
34 each county shall certify to the state tax commission the amount of reduction
35 in property taxes under subsection (1) of section 63-608, Idaho Code, in that
36 county for that year. The certification shall identify the property receiving
37 tax reductions, the value of the property, the property's location, the amount
38 of the tax levy applicable to personal property in the location, and the tax
39 before and after the reduction allowed in subsection (1) of section 63-608,
40 Idaho Code. The certification shall be in the form prescribed by the state tax
41 commission and shall include such additional information as the commission may
42 require by rule as needed to implement the purpose of this section. The certi-
43 fication shall be reviewed and, if necessary, corrected by the state tax com-
44 mission.
45 (2) (a) Subject to the limitations of this section, the state tax commis-
46 sion shall reimburse from the amount appropriated for personal property
47 tax replacement in section 63-3638, Idaho Code, the county treasurer of
48 each county for the reduction shown on the certification provided in sub-
49 section (1) of this section. The county treasurer shall reimburse from the
50 amount received each taxing district and urban renewal agency within the
51 county in proportion to the amount of reduction shown on the certification
52 in subsection (1) of this section as corrected. For each year after the
53 final year of property tax reduction provided in subsection (1) of section
3
1 63-608, Idaho Code, including any deferrals resulting from the provisions
2 of subsection (2) of section 63-608, Idaho Code, the amount distributed
3 to each taxing district and urban renewal agency under this section shall
4 equal the amount distributed in the final year.
5 (b) The state tax commission shall pay one-half (1/2) of the reimburse-
6 ment provided in this section no later than December 20 of each year, and
7 the second one-half (1/2) shall be paid by no later than June 20 of the
8 following year. The money received by the county tax collector under the
9 provisions of this section may be considered by the counties, urban
10 renewal agencies and other taxing districts and budgeted against at the
11 same time, and in the same manner, and in the same year as revenues from
12 taxation.
13 (c) (i) The total reimbursement paid to all counties under this section
14 in any year shall not exceed the amounts shown below, unless a dif-
15 ferent amount is appropriated by the legislature.
16 Fiscal Year Maximum Reimbursement by State
17 2009 $11.6 million
18 2010 $23.2 million
19 2011 $34.8 million
20 2012 $46.4 million
21 2013 $58.0 million
22 2014 $69.6 million
23 2015 $81.2 million
24 2016 and each $92.8 million
25 year thereafter
26 (ii) In the event that actual revenue in a particular fiscal year
27 falls short of the budgeted amount, the scheduled increase in the
28 maximum reimbursement by state for the following fiscal year and each
29 subsequent fiscal year, as specified in subsection (2)(c)(i) of this
30 section shall be deferred by one (1) year.
31 (iii) If the limitation in this subsection results in an amount that
32 is insufficient, the reimbursement paid to each county treasurer
33 shall be reduced proportionally. The total amount paid to the county
34 treasurers shall not exceed the amount certified to the state tax
35 commission under subsection (1) of this section.
36 (d) For each year following the final year of property tax reduction pro-
37 vided in subsection (1) of section 63-608, Idaho Code, including any
38 deferrals resulting from the provisions of subsection (2) of that section:
39 (i) If taxing districts are consolidated, the resulting district is
40 entitled to an amount equal to the sum of the amounts which were
41 received by each district pursuant to this subsection prior to the
42 consolidation.
43 (ii) If a taxing district is dissolved or disincorporated, the state
44 tax commission shall continuously distribute to the board of county
45 commissioners an amount equal to the last distribution prior to dis-
46 solution or disincorporation. The board of county commissioners shall
47 determine any redistribution of moneys so received.
48 (iii) If a taxing district annexes territory, the distribution of
49 moneys received pursuant to this subsection shall be unaffected.
50 (e) Taxing districts and urban renewal agencies formed after January 1,
51 2007, are not entitled to a payment under the provisions of this section.
52 For purposes of the limitation provided by section 63-802, Idaho Code,
53 moneys received pursuant to this section shall be treated as property tax
54 revenues.
4
1 63-611. ADMINISTRATIVE RULES. (1) The state tax commission shall adopt
2 rules, including temporary rules, further implementing subsections (14) and
3 (18) of section 63-201, Idaho Code, relating to real and personal property.
4 The commission shall afford all interested persons a reasonable opportunity to
5 submit data, views and arguments, orally or in writing, and shall consider
6 existing appraisal practices and all matters which the law defines, or the
7 courts may interpret, declare and hold, to be real or personal property under
8 the letter, spirit, intent and meaning of the law, for the purposes of prop-
9 erty taxation. The rules shall consider:
10 (a) The intent of the placement on the land;
11 (b) The method of attachment;
12 (c) The adaptation of the item to the real property;
13 (d) The relationship of the parties; and
14 (e) The existence of an agreement.
15 (2) Administrative rules adopted in accordance with this section, after
16 review and approval by the legislature in accordance with section 67-5291,
17 Idaho Code, shall be presumed to be consistent with legislative intent.
18 SECTION 2. That Section 63-201, Idaho Code, be, and the same is hereby
19 amended to read as follows:
20 63-201. DEFINITIONS. As used for property tax purposes in title 63, chap-
21 ters 1 through 23, Idaho Code, the terms defined in this section shall have
22 the following meanings, unless the context clearly indicates another meaning:
23 (1) "Appraisal" means an estimate of property value for property tax pur-
24 poses.
25 (a) For the purpose of estimated property value to place the value on any
26 assessment roll, the value estimation must be made by the assessor or a
27 certified property tax appraiser.
28 (b) For the purpose of estimating property value to present for an appeal
29 filed pursuant to sections 63-501A, 63-407 and 63-409, Idaho Code, the
30 value estimation may be made by the assessor, a certified property tax
31 appraiser, a licensed appraiser, or a certified appraiser or any party as
32 specified by law.
33 (2) "Bargeline" means those water transportation tugs, boats, barges,
34 lighters and other equipment and property used in conjunction with waterways
35 for bulk transportation of freight or ship assist.
36 (3) "Cogenerators" means facilities which produce electric energy, and
37 steam or forms of useful energy which are used for industrial, commercial,
38 heating or cooling purposes.
39 (4) "Collection costs" are amounts authorized by law to be added after
40 the date of delinquency and collected in the same manner as property tax.
41 (5) "Delinquency" means any property tax, special assessment, fee, col-
42 lection cost, or charge collected in the same manner as property tax, that has
43 not been paid in the manner and within the time limits provided by law.
44 (6) "Improvements" means all buildings, structures, fixtures and fences
45 erected upon or affixed to the land, and all fruit, nut-bearing and ornamental
46 trees or vines not of natural growth, growing upon the land, except nursery
47 stock.
48 (7) "Late charge" means a charge of two percent (2%) of the delinquency.
49 (8) "Lawful money of the United States" means currency and coin of the
50 United States at par value and checks and drafts which are payable in dollars
51 of the United States at par value, payable upon demand or presentment.
52 (9) "Manufactured home," means a structure "mobile home," and "modular
53 building," shall be as defined as a manufactured home in section 39-4105,
5
1 Idaho Code.
2 (10) "Market value" means the amount of United States dollars or equiva-
3 lent for which, in all probability, a property would exchange hands between a
4 willing seller, under no compulsion to sell, and an informed, capable buyer,
5 with a reasonable time allowed to consummate the sale, substantiated by a rea-
6 sonable down or full cash payment.
7 (11) "Operating property" means all rights-of-way accompanied by title;
8 roadbeds; tracks; pipelines; bargelines; equipment and docks; terminals;
9 rolling stock; equipment; power stations; power sites; lands; reservoirs,
10 generating plants, transmission lines, distribution lines and substations; and
11 all immovable or movable property operated in connection with any public util-
12 ity, railroad or private railcar fleet, wholly or partly within this state,
13 and necessary to the maintenance and operation of such road or line, or in
14 conducting its business, and shall include all title and interest in such
15 property, as owner, lessee or otherwise. The term includes electrical genera-
16 tion plants under construction, whether or not owned by or operated in connec-
17 tion with any public utility. The term does not shall include both real and
18 personal property exempt from taxation pursuant to section 63-602L, Idaho Code
19 as determined by rules promulgated pursuant to section 63-611, Idaho Code.
20 (12) "Party in interest" means a person who holds a properly recorded
21 mortgage, deed of trust or security interest.
22 (13) "Person" means any entity, individual, corporation, partnership,
23 firm, association, limited liability company, limited liability partnership or
24 other such entities as recognized by the state of Idaho.
25 (14) "Personal property" includes all goods, chattels, stocks and bonds,
26 equities in state lands, easements, reservations, leasehold real properties
27 and other articles of value that are capable of manual or physical possession,
28 and machinery and equipment, separate and apart from any real property, and
29 the value of which is intrinsic to the article itself, that is not classified
30 as real property and all other property which the law defines, or the courts
31 may interpret, declare and hold to be personal property under the letter,
32 spirit, intent and meaning of the law, for the purposes of property taxation.
33 Only fFor the purposes of payment and collection of property taxes pursu-
34 ant to chapter 9, title 63, Idaho Code, collection of delinquency pursuant to
35 chapter 10, title 63, Idaho Code, and seizure and sale of personal property
36 for taxes pursuant to chapter 11, title 63, Idaho Code, personal property
37 includes manufactured homes not declared as real property pursuant to section
38 63-304, Idaho Code.
39 (15) "Private railcar fleet" means railroad cars or locomotives owned by,
40 leased to, occupied by or franchised to any person other than a railroad com-
41 pany operating a line of railroad in Idaho or any company classified as a
42 railroad by the interstate commerce commission and entitled to possess such
43 railroad cars and locomotives except those possessed solely for the purpose of
44 repair, rehabilitation or remanufacturing of such locomotives or railroad
45 cars.
46 (16) "Public utility" means electrical companies, pipeline companies, nat-
47 ural gas distribution companies, or power producers included within federal
48 law, bargelines, and water companies which are under the jurisdiction of the
49 Idaho public utilities commission. The term also includes telephone corpora-
50 tions, as that term is defined in section 62-603, Idaho Code, except as here-
51 inafter provided, whether or not such telephone corporation has been issued a
52 certificate of convenience and necessity by the Idaho public utilities commis-
53 sion.
54 This term does not include cogenerators, mobile telephone service or com-
55 panies, nor does it include pager service or companies, except when such ser-
6
1 vices are an integral part of services provided by a certificated utility com-
2 pany nor does the term "public utility" include companies or persons engaged
3 in the business of providing solely on a resale basis, any telephone or tele-
4 communication service which is purchased from a telephone corporation or com-
5 pany.
6 (17) "Railroad" means every kind of railway, whether its line of rails or
7 tracks be at, above or below the surface of the earth, and without regard to
8 the kind of power used in moving its rolling stock, and shall be considered to
9 include every kind of street railway, suburban railway or interurban railway
10 excepting facilities established solely for maintenance and rebuilding of
11 railroad cars or locomotives.
12 (18) "Real property" means land, and all standing timber thereon, includ-
13 ing standing timber owned separately from the ownership of the land upon
14 which the same may stand, except as modified in chapter 17, title 63, Idaho
15 Code, and all buildings, structures and improvements, or other fixtures of
16 whatsoever kind on land, including water ditches constructed for mining, manu-
17 facturing or irrigation purposes, water and gas mains, wagon and turnpike toll
18 roads, and toll bridges, and all rights and privileges thereto belonging, or
19 any way appertaining, all quarries and fossils in and under the land, and all
20 other property which the law defines, or the courts may interpret, declare and
21 hold to be real property under the letter, spirit, intent and meaning of the
22 law, for the purposes of property taxation. Real property includes
23 mManufactured homes, constitute real property when located on taxable land,
24 and after a statement of intent to declare as real property has been recorded,
25 provided said statement has not been revoked. mobile homes, modular buildings,
26 tTimber, forest, forest land, and forest products shall be defined as provided
27 in subject to chapter 17, title 63, Idaho Code, taxable improvements on gov-
28 ernment, Indian, state, county, municipal or other lands exempt from taxation,
29 and all improvements on all railroad rights-of-way owned separately from the
30 ownership of the rights-of-way upon which the same stands, or in which non-
31 exempt persons have possessory interests, railroad tracks and ties, pipelines,
32 underground utilities fixtures, electrical generation plants, and all other
33 property not defined as personal property under subsection (14) of this sec-
34 tion.
35 (19) "Record owner" means the person or persons in whose name or names the
36 property stands upon the records of the county recorder's office. Where the
37 record owners are husband and wife at the time of notice of pending issue of
38 tax deed, notice to one (1) shall be deemed and imputed as notice to the other
39 spouse.
40 (20) "Special assessment" means a charge imposed upon property for a spe-
41 cific purpose, collected and enforced in the same manner as property taxes.
42 (21) "System value" means the market value for assessment purposes of the
43 operating property when considered as a unit.
44 (22) "Tax code area" means a geographical area made up of one (1) or more
45 taxing districts with one (1) total levy within the geographic area, except as
46 otherwise provided by law.
47 (23) "Taxing district" means any entity or unit with the statutory author-
48 ity to levy a property tax.
49 (24) "Taxable value" means market value for assessment purposes, less
50 applicable exemptions or other statutory provisions.
51 (25) "Transient personal property" is personal property, specifically such
52 construction, logging or mining machinery and equipment which is kept, moved,
53 transported, shipped, hauled into or remaining for periods of not less than
54 thirty (30) days, in more than one (1) county in the state during the same
55 year.
7
1 (26) "Urban renewal agency" means a public agency created by section
2 50-2006, Idaho Code, or a competitively disadvantaged border community area
3 enumerated in section 50-2903(7), Idaho Code.
4 (27) "Warrant of distraint" means a warrant ordering the seizure of per-
5 sonal property to enforce payment of property tax, special assessment,
6 expense, fee, collection cost or charge collected in the same manner as per-
7 sonal property tax.
8 SECTION 3. That Section 63-304, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-304. MANUFACTURED HOMES, MOBILE HOME OR MODULAR BUILDING TO CONSTITUTE
11 REAL PROPERTY. (1) A For purposes of chapters 10 and 11, title 63, relating to
12 the collection of delinquent property taxes, a manufactured home, mobile home
13 or modular building, may constitute real property if the running gear is
14 removed and:
15 (a) If the manufactured home, mobile home or modular building becomes
16 permanently affixed to a foundation:
17 (i) On land which is owned or being purchased by the owner or pur-
18 chaser of said manufactured home, mobile home or modular building; or
19 (ii) On land which is being leased by the owner or purchaser of the
20 manufactured home, mobile home or modular building if such home is
21 being financed in accordance with the guidelines of the federal home
22 loan mortgage corporation, the federal national mortgage association,
23 the United States department of agriculture or any other entity or
24 agency that requires, as part of its financing program, similar
25 restrictions on ownership and actions affecting title and possession,
26 provided that if a county takes a tax deed to the manufactured home,
27 mobile home or modular building the county shall not be liable for
28 any delinquent or ongoing leases, rents or any other liabilities owed
29 due to the placement of such property; and
30 (b) If the owner or purchaser of a manufactured home, mobile home or mod-
31 ular building records with the county recorder in the county in which the
32 manufactured home, mobile home or modular building will be situated a
33 statement of intent to declare the manufactured home, mobile home or modu-
34 lar building as real property.
35 (2) The exercise of said option shall require all county assessors to
36 treat those manufactured homes, mobile homes or modular buildings whose owners
37 or purchasers have exercised said option as any other site-built residence and
38 shall permit lending institutions to treat said manufactured homes, mobile
39 homes or modular buildings as real property or as any other residence.
40 (3) The form of the declaration shall be prescribed by the state tax com-
41 mission. Any form used shall have attached to it the certificate of origin or
42 the original title to the manufactured home, mobile home or modular building
43 to allow a reversal of the declaration as provided in section 63-305, Idaho
44 Code.
45 (4) If a manufactured home, mobile home or modular building that is not
46 subject to a declaration under subsection (1)(b) of this section, then any tax
47 delinquency in regard to such manufactured home, mobile home or modular build-
48 ing shall be collected as delinquent personal property taxes under chapters 10
49 and 11, title 63, Idaho Code.
50 SECTION 4. That Section 63-309, Idaho Code, be, and the same is hereby
51 amended to read as follows:
8
1 63-309. IMPROVEMENTS ON EXEMPT AND RAILROAD RIGHTS-OF-WAY LANDS -- EQUITY
2 IN STATE PROPERTY. (1) All taxable improvements on government, Indian, state,
3 county, municipal or other lands exempt from taxation, and all improvements on
4 all railroad rights-of-way owned separately from the ownership of the rights-
5 of-way upon which the same stands, or in which nonexempt persons have
6 possessory interests, shall be assessed and taxed as personal real property.
7 (2) Property of the state of Idaho or any department, agency or subdivi-
8 sion thereof, or any other property not subject to property taxation to the
9 owner thereof by reason of the legal status of the owner, held under contract
10 of sale or lease with option to purchase, with lease moneys applicable to the
11 purchase price, by any person, corporation or other association for his or its
12 exclusive use, shall be subject to the purchaser or lessee for property taxa-
13 tion. When such property is held under a contract of sale or other agreement
14 whereby on certain payment or payments the legal title is or may be acquired
15 by such person, firm, corporation or association, such property shall be
16 assessed to such person, firm, corporation or association and taxed without
17 deduction on account of the whole or any part of the purchase price or other
18 sum due on such property remaining unpaid. The lien for any such property tax
19 shall neither attach to, impair or be enforced against any interest of the
20 state of Idaho or any department, agency or subdivision thereof.
21 (3) Refusal to pay the property tax levied upon any equity in state prop-
22 erty by the owner upon demand by the tax collector shall operate as forfeiture
23 of such equity.
24 SECTION 5. That Section 63-313, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 63-313. SPECIAL PROVISIONS FOR TRANSIENT PERSONAL PROPERTY. (1) All tran-
27 sient personal property shall be listed by the owner and shall show the quan-
28 tity, name, model, serial number, if any, year of manufacture, date of pur-
29 chase, cost, whether new or used and other identifying information required by
30 the county assessor. The list of transient personal property shall identify
31 the owner of the property and shall be filed with the home county assessor on
32 or before the first day of November of each year. The owner of transient per-
33 sonal property may elect to treat as his home county that county in which he
34 maintains his residence or usual place of business or in which the transient
35 personal property is usually kept. The report shall be made on forms pre-
36 scribed by the state tax commission and shall identify periods of thirty (30)
37 days or more during which the personal property is located in a county, speci-
38 fying the location of the transient personal property for each month of the
39 current calendar year with a projection of the location for the remaining
40 months of November and December.
41 (2) The county assessor of the home county or the receiving county of the
42 listing shall file within ten (10) days with the county assessor of all coun-
43 ties identified on the report a copy of the report. Each county so identified
44 shall then place a prorated assessment on such personal property on the subse-
45 quent or missed property roll only for the length of time that the personal
46 property was located in their county.
47 (3) In the event that any transient personal property has been or will be
48 taxed for the current year in another state, the property shall be taxed for
49 only that portion of the year that the transient personal property is kept and
50 does remain in the state of Idaho.
51 (4) The provisions of this section shall not apply to transient personal
52 property in transit through this state, or to transient personal property sold
53 by the owner thereof in the home county upon which the taxes for the full year
9
1 have been paid or secured, which said transient personal property is kept,
2 moved, transported, shipped or hauled into and remaining in another county,
3 and there kept or remaining either for the purpose of use or sale within the
4 current year.
5 (5) For transient personal property valued at over fifty thousand dollars
6 ($50,000), any exemption in section 63-607, Idaho Code, available to the tax-
7 payer shall be allocated between counties based on the prorated value provided
8 in subsection (2) of this section.
9 SECTION 6. That Section 63-316, Idaho Code, be, and the same is hereby
10 amended to read as follows:
11 63-316. ADJUSTMENT OF ASSESSED VALUE -- COMPLETION OF ASSESSMENT PROGRAM
12 BY STATE TAX COMMISSION -- PAYMENT OF COSTS. (1) Whenever the state tax com-
13 mission, after a hearing, determines that any county assessor or the county
14 commissioners in assessing property in the county subject to taxation have
15 failed to abide by, adhere to and conform with the laws of the state of Idaho
16 and the rules of the state tax commission in determining market value for
17 assessment purposes, the state tax commission shall order the county assessor
18 and county commissioners of such county to make the necessary changes or cor-
19 rections in such assessments and if the county assessor and the county commis-
20 sioners refuse or neglect to comply with such order, the state tax commission
21 is authorized to and shall forthwith adjust or change the property roll in
22 such county.
23 (2) In lieu of the hearings and actions permitted in subsection (1) of
24 this section, the state tax commission shall monitor each county's implementa-
25 tion of the continuing appraisal required in section 63-314, Idaho Code, and
26 may require each county to file such reports of its progress at implementation
27 of such continuing appraisals as the commission may find necessary. In the
28 event that the commission finds that any county is failing to meet the
29 requirements of section 63-314, Idaho Code, the commission may order that
30 county's indexing or appraisal or reappraisal programs be conducted under the
31 exclusive and complete control of the state tax commission and the results of
32 such programs shall be binding upon the county officers of the county for
33 which ordered. Payments for the actual cost of such programs shall be made
34 from the sales tax distribution created in section 63-3638, Idaho Code, and
35 the amount of such payments shall be withheld from the payments otherwise made
36 under the provisions of section 63-3638(910)(c) and (910)(d), Idaho Code, to
37 the county for which indexing, appraisal or reappraisal has been ordered, and
38 this subsection shall constitute the necessary appropriation to accomplish
39 such payments, any other provision of law notwithstanding.
40 SECTION 7. That Chapter 4, Title 63, Idaho Code, be, and the same is
41 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
42 ignated as Section 63-412, Idaho Code, and to read as follows:
43 63-412. PERSONAL PROPERTY EXEMPT FROM TAXATION. (1) No later than August
44 1, 2007, taxpayers subject to this chapter must submit to the state tax com-
45 mission a statement identifying personal property upon which the taxpayer
46 claims the exemption in section 63-607, Idaho Code, for the year 2007. Failure
47 to submit the statement will result in forfeiture of the exemption. Within
48 thirty (30) days after enactment of this section, the state tax commission
49 shall notify all affected taxpayers of the provisions of this subsection.
50 (2) For calendar years 2008 and thereafter, the taxpayer's statement
51 required by this chapter must identify personal property located in this state
10
1 that is not subject to assessment by a county assessor.
2 SECTION 8. That Section 63-3638, Idaho Code, be, and the same is hereby
3 amended to read as follows:
4 63-3638. SALES TAX -- DISTRIBUTION. All moneys collected under this chap-
5 ter, except as may otherwise be required in sections 63-3203 and 63-3709,
6 Idaho Code, shall be distributed by the tax commission as follows:
7 (1) An amount of money shall be distributed to the state refund account
8 sufficient to pay current refund claims. All refunds authorized under this
9 chapter by the commission shall be paid through the state refund account, and
10 those moneys are continuously appropriated.
11 (2) Five million dollars ($5,000,000) per year is continuously appropri-
12 ated and shall be distributed to the permanent building fund, provided by sec-
13 tion 57-1108, Idaho Code.
14 (3) Four million eight hundred thousand dollars ($4,800,000) per year is
15 continuously appropriated and shall be distributed to the water pollution con-
16 trol account established by section 39-3605, Idaho Code.
17 (4) An amount equal to the sum required to be certified by the chairman
18 of the Idaho housing and finance association to the state tax commission pur-
19 suant to section 67-6211, Idaho Code, in each year is continuously appropri-
20 ated and shall be paid to any capital reserve fund, established by the Idaho
21 housing and finance association pursuant to section 67-6211, Idaho Code. Such
22 amounts, if any, as may be appropriated hereunder to the capital reserve fund
23 of the Idaho housing and finance association shall be repaid for distribution
24 under the provisions of this section, subject to the provisions of section
25 67-6215, Idaho Code, by the Idaho housing and finance association, as soon as
26 possible, from any moneys available therefor and in excess of the amounts
27 which the association determines will keep it self-supporting.
28 (5) An amount equal to the sum required by the provisions of sections
29 63-709 and 63-717, Idaho Code, after allowance for the amount appropriated by
30 section 63-718(3), Idaho Code, is continuously appropriated and shall be paid
31 as provided by sections 63-709 and 63-717, Idaho Code.
32 (6) An amount required by the provisions of chapter 53, title 33, Idaho
33 Code.
34 (7) An amount required by the provisions of chapter 87, title 67, Idaho
35 Code.
36 (8) One dollar ($1.00) on each application for certificate of title or
37 initial application for registration of a motor vehicle, snowmobile, all-
38 terrain vehicle or other vehicle processed by the county assessor or the Idaho
39 transportation department excepting those applications in which any sales or
40 use taxes due have been previously collected by a retailer, shall be a fee for
41 the services of the assessor of the county or the Idaho transportation depart-
42 ment in collecting such taxes, and shall be paid into the current expense fund
43 of the county or state highway account established in section 40-702, Idaho
44 Code.
45 (9) Amounts calculated in accordance with section 63-610, Idaho Code, for
46 annual distribution to counties, urban renewal agencies and other taxing dis-
47 tricts for replacement of property tax on personal property tax reductions
48 pursuant to sections 63-607 and 63-608, Idaho Code, which amounts are continu-
49 ously appropriated unless the legislature enacts a different appropriation for
50 a particular fiscal year.
51 (10) Eleven and five-tenths percent (11.5%) is continuously appropriated
52 and shall be distributed to the revenue sharing account which is created in
53 the state treasury, and the moneys in the revenue sharing account will be paid
11
1 in installments each calendar quarter by the tax commission as follows:
2 (a) Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
3 ious cities as follows:
4 (i) Fifty percent (50%) of such amount shall be paid to the various
5 cities, and each city shall be entitled to an amount in the propor-
6 tion that the population of that city bears to the population of all
7 cities within the state; and
8 (ii) Fifty percent (50%) of such amount shall be paid to the various
9 cities, and each city shall be entitled to an amount in the propor-
10 tion that the preceding year's market value for assessment purposes
11 for that city bears to the preceding year's market value for assess-
12 ment purposes for all cities within the state.
13 (b) Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
14 ious counties as follows:
15 (i) One million three hundred twenty thousand dollars ($1,320,000)
16 annually shall be distributed one forty-fourth (1/44) to each of the
17 various counties; and
18 (ii) The balance of such amount shall be paid to the various coun-
19 ties, and each county shall be entitled to an amount in the propor-
20 tion that the population of that county bears to the population of
21 the state;
22 (c) Thirty-five and nine-tenths percent (35.9%) of the amount appropri-
23 ated in this subsection (910) shall be paid to the several counties for
24 distribution to the cities and counties as follows:
25 (i) Each city and county which received a payment under the provi-
26 sions of section 63-3638(e), Idaho Code, during the fourth quarter of
27 calendar year 1999, shall be entitled to a like amount during suc-
28 ceeding calendar quarters.
29 (ii) If the dollar amount of money available under this subsection
30 (910)(c) in any quarter does not equal the amount paid in the fourth
31 quarter of calendar year 1999, each city's and county's payment shall
32 be reduced proportionately.
33 (iii) If the dollar amount of money available under this subsection
34 (910)(c) in any quarter exceeds the amount paid in the fourth quarter
35 of calendar year 1999, each city and county shall be entitled to a
36 proportionately increased payment, but such increase shall not exceed
37 one hundred five percent (105%) of the total payment made in the
38 fourth quarter of calendar year 1999.
39 (iv) If the dollar amount of money available under this subsection
40 (910)(c) in any quarter exceeds one hundred five percent (105%) of
41 the total payment made in the fourth quarter of calendar year 1999,
42 any amount over and above such one hundred five percent (105%) shall
43 be paid fifty percent (50%) to the various cities in the proportion
44 that the population of the city bears to the population of all cities
45 within the state, and fifty percent (50%) to the various counties in
46 the proportion that the population of a county bears to the popula-
47 tion of the state; and
48 (d) Seven and seven-tenths percent (7.7%) of the amount appropriated in
49 this subsection (910) shall be paid to the several counties for distribu-
50 tion to special purpose taxing districts as follows:
51 (i) Each such district which received a payment under the provi-
52 sions of section 63-3638(e), Idaho Code, during the fourth quarter of
53 calendar year 1999, shall be entitled to a like amount during suc-
54 ceeding calendar quarters.
55 (ii) If the dollar amount of money available under this subsection
12
1 (910)(d) in any quarter does not equal the amount paid in the fourth
2 quarter of calendar year 1999, each special purpose taxing district's
3 payment shall be reduced proportionately.
4 (iii) If the dollar amount of money available under this subsection
5 (910)(d) in any quarter exceeds the amount distributed under para-
6 graph (i) of this subsection (910)(d), each special purpose taxing
7 district shall be entitled to a share of the excess based on the pro-
8 portion each such district's current property tax budget bears to the
9 sum of the current property tax budgets of all such districts in the
10 state. The state tax commission shall calculate district current
11 property tax budgets to include any unrecovered foregone amounts as
12 determined under section 63-802(1)(e), Idaho Code. When a special
13 purpose taxing district is situated in more than one (1) county, the
14 tax commission shall determine the portion attributable to the spe-
15 cial purpose taxing district from each county in which it is situ-
16 ated.
17 (iv) If special purpose taxing districts are consolidated, the
18 resulting district is entitled to a base amount equal to the sum of
19 the base amounts which were received in the last calendar quarter by
20 each district prior to the consolidation.
21 (v) If a special purpose taxing district is dissolved or
22 disincorporated, the state tax commission shall continuously distrib-
23 ute to the board of county commissioners an amount equal to the last
24 quarter's distribution prior to dissolution or disincorporation. The
25 board of county commissioners shall determine any redistribution of
26 moneys so received.
27 (vi) Taxing districts formed after January 1, 2001, are not entitled
28 to a payment under the provisions of this subsection (910)(d).
29 (vii) For purposes of this subsection (910)(d), a special purpose
30 taxing district is any taxing district which is not a city, a county
31 or a school district.
32 (101) Amounts calculated in accordance with section 2, chapter 356, laws
33 of 2001, for annual distribution to counties and other taxing districts begin-
34 ning in October 2001 for replacement of property tax on farm machinery and
35 equipment exempted pursuant to section 63-602EE, Idaho Code. For nonschool
36 districts, the state tax commission shall distribute one-fourth (1/4) of this
37 amount certified quarterly to each county. For school districts, the state tax
38 commission shall distribute one-fourth (1/4) of the amount certified quarterly
39 to each school district. For nonschool districts, the county auditor shall
40 distribute to each district within thirty (30) calendar days from receipt of
41 moneys from the tax commission. Moneys received by each taxing district for
42 replacement shall be utilized in the same manner and in the same proportions
43 as revenues from property taxation. The moneys remitted to the county trea-
44 surer for replacement of property exempt from taxation pursuant to section
45 63-602EE, Idaho Code, may be considered by the counties and other taxing dis-
46 tricts and budgeted at the same time, in the same manner and in the same year
47 as revenues from taxation on personal property which these moneys replace. If
48 taxing districts are consolidated, the resulting district is entitled to an
49 amount equal to the sum of the amounts which were received in the last calen-
50 dar quarter by each district pursuant to this subsection prior to the consoli-
51 dation. If a taxing district is dissolved or disincorporated, the state tax
52 commission shall continuously distribute to the board of county commissioners
53 an amount equal to the last quarter's distribution prior to dissolution or
54 disincorporation. The board of county commissioners shall determine any redis-
55 tribution of moneys so received. If a taxing district annexes territory, the
13
1 distribution of moneys received pursuant to this subsection shall be unaf-
2 fected. Taxing districts formed after January 1, 2001, are not entitled to a
3 payment under the provisions of this subsection. School districts shall
4 receive an amount determined by multiplying the sum of the year 2000 school
5 district levy minus .004 times the market value on December 31, 2000, in the
6 district of the property exempt from taxation pursuant to section 63-602EE,
7 Idaho Code, provided that the result of these calculations shall not be less
8 than zero (0). The result of these school district calculations shall be fur-
9 ther increased by six percent (6%). For purposes of the limitation provided by
10 section 63-802, Idaho Code, moneys received pursuant to this section as prop-
11 erty tax replacement for property exempt from taxation pursuant to section
12 63-602EE, Idaho Code, shall be treated as property tax revenues.
13 (112) Any moneys remaining over and above those necessary to meet and
14 reserve for payments under other subsections of this section shall be distrib-
15 uted to the general fund.
16 SECTION 9. SEVERABILITY. The provisions of this act are hereby declared
17 to be severable and if any provision of this act or the application of such
18 provision to any person or circumstance is declared invalid for any reason,
19 such declaration shall not affect the validity of the remaining portions of
20 this act.
21 SECTION 10. An emergency existing therefor, which emergency is hereby
22 declared to exist, Sections 1 through 7 and Section 9 of this act shall be in
23 full force and effect on and after passage and approval, and retroactively to
24 January 1, 2007. Section 8 of this act shall be in full force and effect on
25 and after August 1, 2007.
STATEMENT OF PURPOSE
RS 17117
The personal property tax applies to business machinery, tools,
furnishings, equipment and some fixtures. It is one of the most
difficult to administer and comply with for government and
business alike. It is a barrier to economic development and studies
indicate that the elimination of the tax not only benefits business,
but will increase the personal income of Idaho citizens.
The purpose of this legislation is to phase out the tax over a set
period of time. Elements of the legislation include an immediate
and retroactive to January 1, 2007 exemption of personal property in
the amount of $50,000 taxable value. This exemption will eliminate
the need for 81 percent of businesses in Idaho from having to comply
with the tax.
The remaining Idaho Business with personal property in excess of
$50,000 taxable value will be phased out starting January 1, 2008.
The legislation guides interested parties to utilize the five tests
used by private appraisers and well-vetted by the courts to determine
what property would be considered real and what would be considered
personal in the process of rule making.
The phase out process would create an annually increased exemption that
would be applied to the personal property. Local governments will be
reimbursed by the state general fund ensuring the exemptions allowed for
in the phase out will not create any shift to other classes of property.
Additionally, this bill provides that the Legislature can delay
implementation of any phase-out increase, in the event of adverse
financial conditions.
FISCAL NOTE
The $50,000 immediate exemption would shift $9.4 million in tax liability
to other classifications of property. This translates to a negligible
.86% based on the current property tax paid. There should be an immediate
savings to counties that will no longer have to track and assess many of
these depreciating assets of the businesses in the state.
The remaining amount of personal property tax to be reimbursed to local
government will be phased in. The fiscal notes are a "worst case scenario." Studies indicate that the state will see at least half of the fiscal notes indicated returning to the state coffers in the form of economic expansion
of both business and personal income as a result of the change in Idaho
policy to eliminate the tax. The static fiscal notes are as follows:
Fiscal Year Maximum Reimbursement by State
FY-2009 11.6 million
FY-2010 23.2 million
FY-2011 34.8 million
FY-2012 46.4 million
FY-2013 58.0 million
FY-2014 69.6 million
FY-2015 81.2 million
FY-2016 and each year thereafter 92.8 million
Contact
Name: Rep. Mike Moyle Sen. Dean Cameron
Rep. Dennis Lake Sen. Brent Hill
Rep. Ken. Roberts Rep. Maxine Bell
Phone: 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 233