Business tax could be dropped - Coeur d'Alene Press: Political

Business tax could be dropped

Officials not sure where lost revenue would be made up

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Posted: Thursday, September 6, 2012 12:00 am

COEUR d'ALENE - Local legislators are divided on whether to do away with a business tax that companies say is burdensome, but county officials call an important revenue source.

The state Senate Pro Tempore Brent Hill distributed a letter to Idaho counties late last month, announcing the state Legislature is considering eliminating the personal property tax for businesses.

Unlike a similar bill from 2008, the letter reads, "the state would not reimburse the counties for the revenues lost as a result of eliminating the personal property tax."

The letter requested counties to comment on how it would affect them.

The answer, according to Kootenai County officials, is badly.

County Commissioner Jai Nelson said the tax is a large funding source for many taxing authorities.

According to county property tax totals, the tax provided $1.2 million for the county in 2010, and $4.6 million for all taxing districts in the county.

"I support the elimination of this, I think this is over burdensome on business," Nelson said, adding that maybe raising other taxes could substitute the revenue. "The issue is, what are the consequences of phasing this out? How do we do it?"

Commissioner Dan Green affirmed that the personal property tax is an important revenue stream for counties.

"We'd have to look at serious reductions of services potentially across the board," he said of if the tax was eliminated with no replacement funds.

Sen. John Goedde, R-Coeur d'Alene, said the tax elimination has been batted around the Legislature for the past several years.

"It sounds to me like if the pro temp is trying to gather some information, that would lead me to believe there must be some push to reconsider it again," Goedde said.

He has heard arguments that by lowering taxes for businesses, Idaho will become more competitive and attract more companies, he said.

"There's a school of thought that will tell you that by making the state more competitive, we will gain businesses and that will increase our revenues," he said.

But he worries if that doesn't happen, the state will simply have to reinstate the tax, he said.

"I think before we do anything along those lines, we're going to have to have our ducks in a row," Goedde said.

Coeur d'Alene Rep. Bob Nonini, also running for state Senate, said he would support scrapping the tax.

Businesses have urged the Legislature to do so because of the arduous processes of calculating personal property, he said.

"We're told it costs more for CPAs to prepare the tax statement than the actual tax bill itself, because it's such a small amount," Nonini said. "It burdens them, and it's cumbersome to business."

Ron Nilson, president and CEO of Ground Force Manufacturing, said there are few businesses in Idaho that wouldn't like to see the tax disappear.

"The average day citizen has no idea the amount of time and energy it takes to account for your personal property tax," he said of submitting a full schedule with assessed value. "The amount of money we pay is almost the amount of time we spend collecting information."

Ground Force spends about 12 to 15 hours on the tax report, he said. The company pays between $10,000 to $15,000 for the tax a year.

He likened the tax to penalizing businesses for purchasing equipment, which makes it harder for Idaho to compete with other states in attracting businesses.

"The amount of time you spend pulling it together ... Time is money for a business," he said.

Nonini said counties could possibly make up for the lost funds by pursuing revenue sharing with cities with sales tax.

"It's just going to take all of us working together to find the right solution," he said.

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  • JoeIdaho posted at 5:43 pm on Sun, Sep 9, 2012.

    JoeIdaho Posts: 2841

    Asu usual, jmow, liberal, stands & justifies more taxes. He thinks he's smart because (thinks) he can tell us a "more effective way to do it". More "sharing of information" is the key, according to jmow. (As thought the government can keep any form of confidentiality, oblmama can't even stop spreading secrets about seal team six....

    THEN, jmow says:
    "The thing that irritates me to no end is conservatives who in one breath will tell you, "there's not enough tax money available, we have to cut this service and that entitlement and the other project," and in the next will tell you, "we need to cut taxes." Okay, if there's not enough tax money now, you want there to be LESS of it?

    You said the same thing twice, and then were incredulous when you didn't comprehend what came out of your own piehole.

    "And no, getting rid of this tax will not make Idaho any more attractive to business than it already is"
    Wrongo, boy genius.
    ALL business looks for environments that are the CHEAPEST to do business in. Now I KNOW you don't believe this, but maybe look at China.....DUH.

    "Every state has enough stupid regulations and stupid taxes that distance to your markets is more important than the withdrawal of one particular stupid tax"
    So; according to your BRILLIANT logic,we should just "keep the taxes, cuz it won't make any difference".....GLAD you don't represent ME.

  • jmowreader posted at 6:29 pm on Fri, Sep 7, 2012.

    jmowreader Posts: 1494

    I used to live in a state that had a personal property tax on PERSONAL property--not just business property--and it included things like dogs and cars. (Yes, in North Carolina you pay property tax on your car every year. Worse, you pay property tax on your DOG--and the tax is higher still if you haven't neutered the poor beast.) They made it as little of a pain (besides the pain of actually having to pay the thing) as possible by printing your last year's report on the current year's report; all you needed to do was line-out the things you got rid of last year, add in the new things you got, and send it in; your two bills--one for non-vehicle tax and one for vehicle tax because those were received by two different agencies--would come in the mail in due time. It's not surprising that Idaho makes you re-inventory everything every year because Idaho can't even figure out how to ask the IRS for a load tape of all its residents' tax returns, like every other taxing state in the Union has accomplished. (You know how when you file a state tax return in Idaho you have to send a copy of your federal return along with the state form? You don't have to do that anywhere else; one of my additional duties in the Army was doing troops' tax returns for them, and Idaho is the only state I remember that requires the federal form be sent to them. The other states get a copy of your form from the IRS.)

    The thing that irritates me to no end is conservatives who in one breath will tell you, "there's not enough tax money available, we have to cut this service and that entitlement and the other project," and in the next will tell you, "we need to cut taxes." Okay, if there's not enough tax money now, you want there to be LESS of it?

    And no, getting rid of this tax will not make Idaho any more attractive to business than it already is. Every state has enough stupid regulations and stupid taxes that distance to your markets is more important than the withdrawal of one particular stupid tax.

  • concernedcitizen posted at 6:59 am on Fri, Sep 7, 2012.

    concernedcitizen Posts: 2530

    I agree with Julee, OALA and PUBCRAWLER

    I paid tax on the fixtures in my business When I bought them and I have to pay a USE tax as well? No wonder CdA has a hard time attracting business with ALL of the taxing entities pulling from the bottom line.

  • exclamation posted at 2:23 am on Fri, Sep 7, 2012.

    exclamation Posts: 56

    yeah cause trickle down economics has worked so well for Idaho in the past twenty years right? I mean we do have some of the highest wages in the nation right? Are you catching my sarcasm here tater? Oh wait republicons don't like nun of dat fancy book learnin stuff so, the idea of sarcasm might be a little much for you.

  • JoeIdaho posted at 7:31 pm on Thu, Sep 6, 2012.

    JoeIdaho Posts: 2841

    LISTEN to the way this is displayed & understood:
    NO real consideration is given to the people/businesses thathave to PAY the tax, ALL of the consideration is given directly to the "what will we do without the tax money????"

    And the liberals whine on....ALL for more taxes, in their typical communist ways.
    "Oh, you own a business? You MUST be cheating someone & OBVIOUSLY that business wouldn;t be there if it weren't for government help"

    All liberals should leave Idaho right now. Vote for me & I'll make it mandatory.
    Joseph (P) Idaho

  • Jullee posted at 4:06 pm on Thu, Sep 6, 2012.

    Jullee Posts: 566

    Interesting comments here, but OALA and PUBCRAWLER are the only ones that know what they are talking about...It's about personal property taxes .. Read the article and if you like the idea , all of you can start to pay taxes every year on "every personal item" you own (Bed ,Table Chair fridge,rug,blanket, stove ) etc. ..year after year.

  • chouli posted at 11:10 am on Thu, Sep 6, 2012.

    chouli Posts: 1294

    Dropping the tax sounds like a great idea...BUT don't think you can make up the lost revenue on the backs of the taxpayers.
    Do without the revenue from that source and perhaps the increase in business income generated will also increase the taxes paid in by the business. It sounds like a ridiculous tax on businesses anyway, so why is it still around?
    The state, counties, and all taxing entities need to stop taxing everyone excessively. How about making your budgets smaller to accomodate less tax revenue when times are tight and when the economy is better and more tax monies come in, SAVE some for the tight times again. What a revelation.

  • OALA posted at 10:05 am on Thu, Sep 6, 2012.

    OALA Posts: 6

    It is obvious from the posts that commentors are not understanding what a pain the personal property tax is for businesses. It is the equivalent of once a year having to go through your home and figure out what your dishwasher, stove, microwave, refridgerator, flat screen TV, computer, couch, bed silverware, clothes hangers, etc.... are worth every year. If you don't make a list, check it twice and turn it in, the assessor will just assign a value to the property you may have based on what your neighbors report and tax you on that value. Getting rid of this huge time suck would benefit current businesses and, at the very least, be one less reason for new ones to open shop in another state.

  • Bob Loblaw posted at 9:22 am on Thu, Sep 6, 2012.

    Bob Loblaw Posts: 413

    Flat taxes will never happen, because legislators derive most of their power from running a protection racket. They create loopholes and money laundering opportunities for their allies, who funnel some of that money back into campaigns.

    That being said, when taxes are lowered on business, more revenue is generated for the government. This is not a theory; it has happened time and time again. The converse is also true.

    Want more jobs? Lower the tax.

  • mister d posted at 7:31 am on Thu, Sep 6, 2012.

    mister d Posts: 1531

    Everyone whines about paying taxes. Flat tax is a great idea for everyone and fair. No more write offs for that luxury condo a business owner has and "lets" employees use once a year for a week so they can write it off. It off. It is really cumbersome and expensive for me to do my taxes also, flat tax would solve that.

  • pubcrawler posted at 7:17 am on Thu, Sep 6, 2012.

    pubcrawler Posts: 85

    The personal property tax is a royal pain. It's not the amount of tax. It's the ridiculous amount of time spent inventorying fully depreciated junk to comply with the thing.

  • idahotater posted at 6:48 am on Thu, Sep 6, 2012.

    idahotater Posts: 54

    The comments here should be good. The majority will be from the whinning, lazy liberals who think business's are the big bad wolf. The make all the money and keep it for themselves, those diabolical devils. It will be the same people who complain about "Idaho and their low wages, blah blah blah". But once again it will show the ignorance of this group. The more taxes a company has to pay is just that much less money for wages. Look no further that the previous comment.

  • voxpop posted at 5:30 am on Thu, Sep 6, 2012.

    voxpop Posts: 738

    What tax isn't "burdensome?" I feel exactly the same about state income tax, local property tax, sales tax, vehicle registration tax .... the list is endless. It's necessary, plain and simple. I've got an idea though. Why not just go with a flat tax. That simple tax which can be filed on a 3x5 card. No deductions, no tax breaks, no bail outs - just a flat percentage on EVERYTHING for everyone. Any income, from any source, is taxed at the same rate. No more GE, no more Buffet, no more Romney. Would that still be "burdensome" Nonini?

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