FOR IMMEDIATE RELEASE                            Contact: Senator Lee Heinrich

April 2. 2007                                                 Phone: 208-271-6243 or Email

                                                                                           lheinrich@senate.idaho.gov

 

Cascade, Idaho:  District 8 Senator Lee Heinrich serves on the Idaho Senate’s Local Government and Taxation Committee, and is adamant about discussing tax reform, and believes that we should also be discussing the proper role of Government in our lives. 

 

“We need a tax system that raises sufficient revenue to fund the activities that are required of Government.” Heinrich said, “But it must be a system that is equitable and efficient.”

An interim legislative committee that met throughout the state in 2005 recommended seven major property tax proposals. They were the product of many months of hearings throughout the state.

Recommendations of the interim committee included:

• Change the homeowner's exemption by raising its maximum level from $50,000 to $75,000; DONE
• Remove half of the current school funding from property tax and replace it with state general fund money; DONE
• Expand the "circuit breaker" exemption for low-income elderly and disabled; DONE
• Set up a deferral program for seniors who want to put off property tax payments until they die or sell their homes; DONE
• Close the developer's loophole on agricultural property. DONE

What wasn’t addressed was personal property tax. Each year Idaho businesses pay a personal property tax on their equipment, furniture and other tangible items related to their operation. Personal property tax is disproportionately borne by businesses, while other sectors of the economy are exempted from having to pay personal property taxes. 

• A tax on personal property amounts to what is essentially double taxation because the business pays sales tax when the item is purchased (unless it is subject to the production exemption), and then is taxed again and again every year as long as the item is part of the business; and
• Personal property taxes are a perverse disincentive to business investment, because business must pay tax on any new equipment purchases and improvements.

“In Idaho, we need tax restructuring that provides "across the board" relief to all taxpayers, rather than shifting the tax burden from one class of taxpayers to another.” Heinrich said.

This year the Idaho Legislature had three bills that addressed the issue of personal property tax.  None of which completely provided the relief needed.  Heinrich hopes to be appointed to a Legislative Interim Tax Committee, which will continue to review all tax exemptions and credits, during the summers. The ultimate goal is to repeal the entire personal property tax without a tax shift to the homeowner. 

 “We need a sound tax policy - under the current tax system, the government collects revenue through a wide variety of taxes on individuals and businesses, which may not be fully visible to individual citizens.” Concluded Senator Lee Heinrich,  “I am committed to working diligently to promote a complete overhaul of the tax system to make it affordable for individuals, while maintaining a stable environment that reinforces opportunities for private enterprise. “Mom and Pop” businesses truly are our economic development.”

 

If you have any thoughts about this or any other issue Senator Heinrich welcomes your comments. He can be contacted by email at lheinrich@senate.idaho.gov or by mail at Senator Lee Heinrich, Idaho State Legislature, State Capitol Building, P.O. Box 83720, Boise, Idaho 83720-0081. Contact numbers during the legislative session are: 208-332-1000 or toll free 800-626-0471 and for the hearing impaired 800-626-0472, fax number 208-334-5397. After the legislative session Lee can be contacted at 208-382-3244 or mail to P.O. Box 1092, Cascade Idaho 83611.