NFIB Victory—Bill Cutting UI Tax Rates Become Law

Date: February 05, 2018

Next Up: Conforming state tax rates to federal reforms

State Director Suzanne Budge reports from Boise on the small-business agenda for the legislative week ending February 2

Gov. Butch Otter’s tax-cut proposal, H463, was introduced January 30 in the House Revenue and Taxation Committee, with Republicans supporting the measure and Democrats opposing it.

According to the bill’s sponsor, Majority Leader Mike Moyle, “Arguably, this bill is the biggest tax-reduction bill we’ve seen in the years that I’ve been in the Idaho Legislature and maybe in Idaho history,”

H463 would conform Idaho’s income tax code for 2018 to federal changes, including the doubling of the standard deduction, and the removal of dependent exemptions. These changes cost Idaho taxpayers $97 million more in 2018. The state tax code is adjusted to offset the increase, by lowering all personal and corporate income tax rates by 0.475 percent, or $159.6 million, and creating a new non-refundable Idaho child tax credit of $130 per child.

Bottom Line: $202 million in tax cuts to Idahoans, and a net reduction in state general fund tax revenues of $104 million.

Health Care Road Show

Gov. Otter and Lt. Gov. Brad Little hit the road touting their proposal for Idaho Health Care Plans, as outlined in the executive order signed by the two officials January 5. The Department of Insurance has issued guidelines, released January 24, outlining provisions that will be required for the new health plans to comply with Idaho Code, Title 41, Chapter 52. “State-Based health benefit plans” or “state-based plans, will not be subject to the federal restrictions applied to ‘grandfathered’ or ‘transitional’ plans. The department projects 30-60 percent lower premiums under the new plans. Idaho’s proposals have received national attention in recent weeks including coverage in The Hill, The Wall Street Journal, and The Washington Post and other national media outlets.

NFIB is hosting an exclusive Town Hall for its members with Governor Otter and Lt. Governor Little on February 13 at 10 a.m. NFIB members will have the opportunity to ask both men about their health-care initiative. Check this website for details on how to join the call. This is your chance to chat with the governor and lieutenant governor about their plans for reducing premium costs and providing access to more flexibility insurance products.

NFIB Victory—Bill Cutting UI Tax Rates Become Law

H335, the first bill introduced in the 2018 session, was signed into law by the governor January 31, following unanimous approval by both House and Senate. H335 was fast-tracked ahead of routine business to provide certainty to businesses that the new lower rates would apply in 2018.

What policy-makers said about H335:

Senate President Pro-Tem Brent Hill, R-Rexburg: “This is a tax cut for every single employer in the state of Idaho – everyone who has employees is going to get a tax cut here.”

Idaho Department of Labor Director Melinda Smyser: “It’s going to help all businesses, from small to large.”

The bill, cutting unemployment insurance rates, is projected to save businesses $115 million over three years and will be retroactive to January 1, 2018. NFIB State Director Suzanne Budge testified in support of the bill, which is expected to reduce unemployment taxes by 30 percent.

Fast-tracked for early passage, the legislation lowers the fund size multiplier (part of the formula to determine what employers ultimately pay) from 1.5 to 1.3. The rate change maintains adequate reserves in the UI fund, which has more than $700 million and is on track to be above and beyond what the federal government recommends, starting in 2018.

Prior Reports, News Releases, Editorials, Testimony

January 26 Report—Bill Cutting UI Tax Rates Sent to Governor

January 19 Report—Unemployment Insurance Rate Cut on Fast Track for Passage

January 12 Report—Idaho Legislature Returns to Business

January 5 Testimony—NFIB Idaho Testifies on the Small-Business Economy

December 20, 2017, News Release—Poll of Small-Business Owners a Guide for 2018 Legislature

[Tile photo courtesy of Gov. Butch Otter’s Flickr page]

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