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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