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On the last day of its 2008 session, the Idaho Legislature passed a compromise plan to give businesses
a break on personal property taxes. However, there are strings attached.

Repeal Fails

Businesses pushed to repeal the $120 million annual personal property tax on business machinery,
tools, furnishings, equipment and fixtures. Lobbyists presented studies to show that eliminating the tax
would result in significant economic stimulus for the state.

The Legislature debated a plan to phase out business personal property taxes over a five-year period
and ultimately decided it would be too costly. Instead, the House and Senate unanimously passed HB599
and Gov. Otter signed it into law.
 

Tax Exemption – Maybe?

HB599 allows companies to exempt the first $100,000 worth of business equipment from personal property taxes starting in 2009. But for the tax relief to go into effect, annual state tax revenues must grow by 5%. Revenues are only projected to grow 2.8% for fiscal year 2009.

If and when tax revenues exceed 5%, businesses with multiple locations will get the exemption in each county they have operations. Legislative estimates show more than four-fifths of the nearly 60,000 businesses that pay personal property taxes could qualify for this exemption.