03/27/2008
CONTACT: Suzanne Budge, 208-345-6632 or Tony Malandra, 415-664-9685
'Amendment process' is a chance to avoid taking a difficult stand. We want to know who our friends are.
BOISE, Idaho -- In the states that haven't wisely killed it off already, it remains one of the most annoying, frustrating and least economically beneficial to government of all taxes: the personal property tax. Today, the National Federation of Independent Business, the state's leading small business association, called on Idaho senators to be at least forthright in their intentions to keep it on the books, rather than try and hide behind the cloak of placing a bill to abolish it in the "amendment process."
This tax, which only businesses pay, is levied on tools, equipment, furniture, and other tangible items related to their operation. In other words, that beat-up office couch a business purchased 10 years ago (and paid sales taxes on it then) is taxed each and every year. Besides requiring hours of paperwork for small business owners, and compliance in paying the tax from ever narrower profit margins, it remains highly questionable if the state even recoups what it puts out in having it on the books. Other states lowered their personal property tax rates after people questioned if the cost to assess and collect it was even worth it, given what it brought in to government coffers.
"It is a big pain for small businesses, because it sucks up paperwork time and money for compliance," said Billy Knorpp, a Boise entrepreneur and Leadership Council chairman for NFIB/Idaho, the state's leading small business association. "It is also one of the most unfair of all American taxes, because it is a double taxation. A sales tax was already paid on all the personal property when it was bought. It also is a perverse disincentive to business investment, since any purchase must be calculated on how long the tax will have to be paid on the life of the tangible asset. Over time, the Legislature has eliminated this tax for everyone but business, because they recognized how unfair it was. It's time to end it once and for all. Bad tax policy is bad tax policy for everyone. If it was abolished for individuals and farmers, it should be abolished for businesses. The time is now. Vote on this bill."
By a vote of 39 to 31, the Idaho House of Representative concurred with Knorpp's assessment and passed House Bill 599, which would abolish the tax altogether. The bill's momentum carried it through its first hurdle in the state Senate, when the Senate Local Government Committee also passed it by a vote of 5 to 4. It now awaits a full Senate vote, before it can go to the governor's desk.
"What they are trying to do is avoid voting on H599," said Knorpp. "All we ask is that if it has to go down to defeat, it should at least do so by a public vote, not by senatorial sleight of hand." Knorpp can be reached for further comment at 208-376-8121 or at bknorpp@rvpsystems.com.
