The city of Bellevue last week expressed opposition to a proposal by Gov. Butch Otter to repeal the statewide personal property tax.
Rep. Grant Burgoyne, D-Boise, told the Associated Taxpayers of Idaho in December that he would support such a repeal and has drafted legislation that could bring it about. Otter called for the elimination of the tax in exchange for more local authority to raise tax revenue during his State of the State speech on Jan. 7.
Personal property tax is charged on items used by businesses, including furniture, uniforms, display racks, machinery and equipment (except for farm equipment), computers and medical equipment. Blaine County Clerk JoLynn Drage said personal property is portable and not attached to real estate.
About $645,000 was collected county-wide last from the personal property tax. County Assessor Valdi Pace said Sun Valley Resort, Power Engineers and Albertsons were the top three contributors to the county’s personal property tax revenue.
Opponents of the tax say it discriminates against production or manufacturing businesses, in favor of service businesses. They also claim that it is cumbersome and difficult for businesses to administer.
Supporters of the tax, including the Bellevue City Council, say it is a necessary source of revenue. A letter written last week to Senate President Pro-Tem Brent Hill by Bellevue Planning Director Craig Eckles and signed by the council members cites the importance of the tax in paying for local services.
“As elected officials responsible for providing essential public services, our city of 2,200 people, about 800 taxpayers, would be adversely impacted,” the letter states.
The council stated that $13,000 in annual revenue would be lost if the tax were repealed, enough funding to pay for loan payments on two police vehicles.
The council asked Hill to require “replacement revenue” if the personal property tax revenue is eliminated.
The council also stated that $181.5 million of total taxable property value in the city has been lost since 2008 due to the recession, leaving the city with a total of $142 million.
“This net taxable value loss is absorbed by the remaining taxpayers in our community,” it stated.
State law lists numerous nontaxable personal property values, including schools, airports, government properties, churches, charities and some hospitals. All property taxes—both personal and real property—are collected by counties for redistribution back to taxing districts through county treasuries for local services, including for municipalities.
Perhaps other methods of taxation could be employed by the city if Otter’s proposal to allow “more local flexibility in raising tax revenue” moves forward.
Currently, local taxation authority is limited to increasing property tax revenue by up to 3 percent per year and levying local-option sales taxes in resort towns. Unlike other cities in the Wood River Valley, the Bellevue economy does not meet the tourist-based requirements that would allow it to charge a local-option tax. The local-option taxes in Hailey, Ketchum and Sun Valley provide significant sources of revenue.
Burgoyne said his bill would expand that authority to include taxes on liquor, meals, retail sales and even income.
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