Eliminating Personal Property Tax on Businesses
Issue Overview: Once again, complete elimination of the personal property tax on business came up short, but the Legislature did raise exemptions from it.
Issue Background: Each year Idaho businesses pay a personal property tax on their tools, equipment, furniture and other tangible items related to their operation. Idaho's law on property sets up two distinct categories of property tax -- real property and personal property. A tax on real property (land and improvements) is paid by both individuals and businesses. A tax on personal property (everything used as part of the business that is not permanently attached to the land) is paid only by businesses.
NFIB Position: By a vote of 75 percent on their 2005 State Ballot, NFIB members support eliminating the personal property tax altogether.
Issue Status: Although complete elimination of the personal property tax on business failed, a legislative conference committee did raise exemptions to it to $100,000, restricted it to one business location in a county, and made the trigger date for it to take effect to when state revenues exceed 5 percent from the previous fiscal year.
