From the Executive Director: Week of March 14

Major Property Tax Legislation Held

House Bill 741, legislation to raise the sales tax from 6% to 7.85% and properties receiving the homestead exemption from paying most nonschool property taxes, will not move forward this session.The legislation proved to be too complex and too big of a change in tax policy to advance this late in the session. In spite of House Bill 741 not moving forward, legislators plan on continuing to work on the concept in the interim and bring back similar legislation in 2023.

Because House Bill 741 is dead, there are no major property tax relief proposals on the table. There are a few property tax relief measures that may move forward, but nothing as impactful as House Bill 741. Bills still on the table include:

• House Bill 481: Raises eligibility for the circuit breaker program from 125% of county assessed value to the greater of $300,000 or 150% of the county median assessed value.
• House Bill 648: Requires local governments to dedicate 50% of year over year revenue sharing growth to property tax relief.
• House Bill 690: Establishes a property tax relief program funded by surplus state general fund revenues. Under the proposal, up to $40 million may be allocated to counties for one time property tax relief and up to $40 million to cities for one time property tax relief.
• House Bill 735: Establishes a non property tax funding source for public defense, repeals the county charity levy, repeals the county medically indigent program, and reduces county property taxes by $20.9 million.

The Idaho Legislature does not have much time to tackle legislation to reduce property taxes as it is pressing forward with a March 25th target date for adjournment. Essentially, legislators have a week to sort out how to proceed with the proposals on the table. There is time for action, but the window is closing.