Business tax repeal would impact budget - Bonner County Daily Bee: Local News

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Business tax repeal would impact budget

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Posted: Saturday, February 9, 2013 8:47 pm

SANDPOINT — Bonner County could have to grapple with a $1.2 million budget shortfall if state lawmakers eliminate a tax on business’ personal property, according to the Idaho State Tax Commission.

Idaho businesses have advocated for the elimination of the personal property tax because of the bureaucratic burden of calculating it. Proponents contend eliminating the tax would make Idaho businesses more competitive and draw more companies to the state.

But there is growing concern that elimination of the business tax would shift the burden onto landowners via increased property taxes or force taxing districts to cut services to make up for the shortfall.

A state tax commission analysis of every taxing district in the state — from counties and cities to fire and school districts — indicates that budgets could be significantly impacted.

Idaho counties received $39 million in personal property taxes in 2012, according to the commission’s analysis. School districts also received about $39 million and cities received approximately $33 million in 2012.

Bonner County received $1,189,403 in personal property tax revenue in 2012, which is 6.5 percent of the total property taxes collected.

“Percentage-wise, we’re not really that bad off, although it would still be a big hit,” said Bonner County Commission Chairman Cary Kelly.

Kelly said the commission is keeping a close eye on the issue and is hoping lawmakers will find a way to mitigate budget impacts to counties.

“Obviously, it’s going to affect next year’s budget quite a bit if it in fact does go through and if we have to make up that shortfall if it’s not offset or phased in over a number of years,” said Kelly.

Kelly said the county may accelerate its budget-setting process to account for the intended consequences of the tax’s elimination.

“It all sounds real good until you find out what the impact’s going to be,” he said. “If you told everybody, ‘Yeah, we’ll get rid of it but we’re increasing property taxes by 10 percent.’ They probably wouldn’t think it was all that great of an idea.”

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18 comments:

  • Here's What I Say posted at 12:52 pm on Wed, Feb 13, 2013.

    Here's What I Say Posts: 1240

    Seems to me that businesses already pay hefty taxes to all these taxing entities in their property taxes or the cost of their rent. Plus businesses pay another load of taxes placed on them by cities for such things as lodging, downtown business association tax, business licenses, etc. etc. This is just one more way to drain money from the coffers of businesses that mostly struggle to keep above water, especially in the current economic climate. I'm am in no way anti-taxes but double and triple taxation is unfair.

     
  • L Wallace posted at 10:39 pm on Tue, Feb 12, 2013.

    L Wallace Posts: 1412

    Reddawn, this is not yet "one of the big problems the Rs have created", it is only being proposed. Lots of things get proposed that do not get legislated into law. In my opinion you seem simplistic in not realizing that subsidies have been paid by the government to keep farms economically feasable as well as other natural resource collection that needs to be stimulated. Government used to operate on the idea to subsidize that which you want more of and tax that which you want less of. If you want less oil exploration and less development of this form of energy then increase the taxes by reducing the subsidy. Then we can be more vulnerable to enemy Arab regimes for oil and our fuel prices will go up to cover that tax. If profit is a sin in your book, how come profit for your business is not a sin? Your rant against one political party helps fuel the inability of the party's to work together.

    The reason personal property tax is charged to business is because businesses use equipment in operation of their for profit business. Dale 100ca is also right that businesses do not pay taxes, they consider it a cost of doing business and add it to their product or service. So, we all pay a small amout towards a particular business's personal property tax.

    Eydee 1 if the tax were spread around you would still pay some amount. You might pay more to the individual taxing districts than you do now in personal property. Besides, as it is now you can include it in your overhead and charge it to your customers.

    Howzat, I disagree that there should be a low threshold amount of tax. Let the micro business grow and it will pay more personal property tax as they get on their feet and buy both, equipment and hire employees. A low threshold might keep a tiny buisness from even trying to start up.

    Shawnm, this tax is on the equipment a business uses over and over in making a profit from the repeated use of this equipment to make a profit. It has been established for decades and to change it will make more voters unhappy with the change than will be made happy by letting businesses stop collecting this revenue for the state.

     
  • Dale100ca posted at 12:27 pm on Tue, Feb 12, 2013.

    Dale100ca Posts: 5

    Businesses do not pay taxes. From the smallest mom and pop store to giant corporationss they are only tax collectors for all levels of government. The only way to lower what we pay is to cut government bureaucracy at all levels. Idaho does a better job than most states but they can still improve.

    When you try to lower their revenue they always threaten to cut teachers, fireman and policeman. What they need to cut is the coordinators coordinating the coordinators. Multiple levels of government doing the same job and trying to protect their fiefdoms.

    Cut off their revenue and make them justify every dime they spend. We probably slso need term limits on all government employees

     
  • Howzat posted at 9:10 am on Tue, Feb 12, 2013.

    Howzat Posts: 430

    Eydee- simply look at the list the county assessor's office sends you each year- you gave them that list of personal property you use IN YOUR BUSINESS- and make changes adding whatever is new and whatever is not used anymore. No big deal.
    The personal property tax arose from the large companies like Walmart and Safeway that have hundreds of thousands of dollars in equipment, shelving and supportable goods used in their businesses. Like the title says, personal property is not REAL property and is not taxed with a property tax assessment. Real property is the building and anything affixed to the land. Personal property is a whole 'nother category.
    I too own a small business and have no problem paying the piddley amount they charge me. Once a year they send me a list, I go through it, sign it and send it back.
    There was also a plan to set a minimum limit on the amount taxed because it does cost them more to monitor the very small businesses and a threshold would get rid of that.
    I also am really curious where they are going to come up with the 1.2Million that will be cut out.

     
  • SdptMom posted at 5:00 pm on Mon, Feb 11, 2013.

    SdptMom Posts: 176

    Eydee .. seriously "every stinkin' thing"? Sure seems like a'bunch of whining in these posts. I'm grateful I have a business + own some equipment in order to make a living. Have no problem paying property taxes .. especially pleased if they go toward good things in our community + schools.

    Like they say, pull'up your big girl/boy panties + deal with it[wink]

    One thing I do wish the elderly had their property taxes grandfathered to the rate when they retired from their work.

     
  • Eydee1 posted at 3:34 pm on Mon, Feb 11, 2013.

    Eydee1 Posts: 11

    Ok, I haven't read through everyone's comments so I don't know if I am just repeating. This tax on business owner's property is an unjust tax to say the least. I can't tell you how ticked off I get every year having to go through our itemized list of every single item down to the dang keyboard I'm typing on so that I can be taxed on it year after year, (some things over 10 years old). I paid tax on everything when I bought them, but to pay year after year is a bunch of bologna!
    I'd feel better having it spread out to everyone with a very small percentage if that's what it takes to eat up the deficit. There really is a better way, I'm sure. I have to pay tax on and keep track of every stinkin thing we buy year after year. How does this even make sense?

     
  • shawnm posted at 3:28 pm on Mon, Feb 11, 2013.

    shawnm Posts: 13

    Well I'm not nearly as educated about this subject as soon seem to be however In my opinion I am trying to understand how it came to be that if I purchase a new printer or phone for say, I pay a sales tax upon purchase, why would or should I have to pay a tax percentage even at a depreciated value at the end of every year for something I own? I pay all my state and federal taxes without question but this taxation has me scratching my head. Can someone enlighten me?

     
  • Jaake posted at 3:03 pm on Mon, Feb 11, 2013.

    Jaake Posts: 245

    Just another reason for a local sales or option taxes to help fund necessary services, road maintenance, and of course school needs. Funds should be earmarked for vital and necessary expenses only. Stop sticking it too the property tax payers, just because they are easy targets. With sales taxes everyone shares the burden, and the elderly on fixed incomes will not be taxed out of their homes.

     
  • SdptMom posted at 1:48 pm on Mon, Feb 11, 2013.

    SdptMom Posts: 176

    Very well said, Reddawn. I, too, am a business owner + have no issue with paying property tax on my equipment. This is just another angle from the Fat'cats to line their pockets + claim they're helping the simple working class .. BS!!!

    Sad we can't trust our Idaho politicians .. just follow the $$$ .. REAL change will only come with meaningful reform to campaign financing .. and add a head-check on greed amongst wealthy individuals.[wink]

     
  • reddawn posted at 10:08 am on Mon, Feb 11, 2013.

    reddawn Posts: 1990

    Mr Wallace, As a small business owner for years, this tax as you say has not done harm to us. Each year it does go down as our desks,our equipment ages. As a former Republican along with my husband and neighbors this is one of the big problems the Republican party has created. Tell Americans one story, all along supporting big business using lies of hiring more people when all along it has been about more for the profit for themselfs. We see it all the time. Cut wages, medical, no retirement 401, all for the personal gains. If this happens We will pay more in property tax, not if, when. Just like the oil business,the Feds give them tax cuts of 2.2 billon a year and they made 80 billion , that is not math, all along controlling the pump for personal gains, it just is a sin in my book. Once again Congress voted to keep this tax cuts for big buiness in oil, just take a look at who supported it, the Republicans, the Ds wanted it to drop and let the big boys pay taxes. Now here we are, in our backyard, the Republican platform of lies is finally showing its horns in truth. We already pay income tax now this would hurt so many . The up side new companies are moving into Sandpoint, tec companies. small business, we need to keep it affortable for their employees. Really if it was possible I would vote for a person who is in the center of both parties, however today a divide along with total anger has become the new way to keep people blind to both sides , instead of stepping outside, working togather and getting things done.

     
  • L Wallace posted at 8:58 pm on Sun, Feb 10, 2013.

    L Wallace Posts: 1412

    If this were a new tax I would not be for it. But since it has been in place for 40+ years, let's just leave it alone. This is not a good time to "rock the boat" in the economy or to shift more taxes onto individuals.

    I spent well over 20 years in business in this county and paid this small tax for all of those years. It may be a bit of a problem the first year to figure out what personal items are used in your business but after the first year the depreciation schedule is set in place and the only items to put on the list from year to year is the new equipment bought for the business. It is an exaggeration to say it is a major problem.

    I consider myself a conservative but this constant attempt in Idaho to give big business a free ride is beginning to bore me towards the Republican tax revenue stand.

     
  • LakeViewer posted at 5:38 pm on Sun, Feb 10, 2013.

    LakeViewer Posts: 936

    I have paid this tax here for years on business property. I have found the assessor to be quite reasonable, and it has not been much of a burden. Business property must be accounted for when preparing taxes at both the state and federal level to take depreciation deductions. Those same accounting requirements can be used to account for and pay the property tax. For most small businesses, it is not a big deal.

    On the other hand, larger business pay much more tax because they have much more taxable property. I think the tax should remain, because large business should help pay the bills for the services they use for example, fire districts, sewer districts, hospitals, schools and the list goes on.

    If they use the services, they should help pay the bills. They are part of our communities.

     
  • KJB posted at 2:48 pm on Sun, Feb 10, 2013.

    KJB Posts: 643

    All businesses have to pay this tax...even the smallest of businesses. Does this really make sense? It is not so much the $$ paid (because for a small business, truly this is not a big deal), but the inventory and record-keeping involved. It is ridiculously burdensome. I can't even imagine if you are a larger business with dozens of computers, desks, chairs, lamps, software packages, etc. that you have to keep track of and document every year. It's crazy!

    Find another way to tax a business in order to not lose out on much-needed revenue. The problem is with the way this is administered than the actual tax itself.

     
  • LakeViewer posted at 1:25 pm on Sun, Feb 10, 2013.

    LakeViewer Posts: 936

    This is a scheme to move taxes paid by big corporations to the local level. Big business can pay their fair share like the rest of us.

    This comes about because the Idaho political aristocracy is proposing to follow a national agenda along the same lines. You must ask who is pulling the strings on our puppet state politicians who would support this scheme? Is it time for an Independent candidate for Governor that will represent the "people"?

     
  • Howzat posted at 1:17 pm on Sun, Feb 10, 2013.

    Howzat Posts: 430

    Helen, you are so right! Taking 1.2M out of the budget would SERIOUSLY impact the services provided by the county. How would they make that up?, Cary Kelly's last two sentances cover that.

    Easterner- your friends aren't taxed at a higher rate because their place looks neater, its all ad valorum, based on actual value established and proven by sales of other properties.

     
  • Helen Newton posted at 11:45 am on Sun, Feb 10, 2013.

    Helen Newton Posts: 537

    "A state tax commission analysis of every taxing district in the state — from counties and cities to fire and school districts — indicates that budgets could be significantly impacted."

    So this is what the tax commission thinks..... that there COULD be a significant impact? I'm thinking the "C" should be replaced with a "W".

    Whoever thinks this is a good idea needs only to provide the alternatives for making an equal amount of money available.

    Anyone who thinks county law enforcement and roads would skate on cuts needs to think again. People may say cuts could be across the board but when they call 9-1-1 and nobody is available or when their roads are impassable for lack of maintenance, they may think twice.

     
  • Easterner posted at 8:54 am on Sun, Feb 10, 2013.

    Easterner Posts: 26

    I personally don't believe their should be a personal property tax. I never understood why government was allowed to add a yearly tax on a piece of equipment a business owned just to stay in business. They already pay taxes on their profits and they paid taxes when they purchased the property. My friend has to pay personal property tax on garden hoses and sprinklers and the lawn mower just because they use them to water their lawn to keep their business looking neat AND they get taxed a higher rate because the grounds look neat and not run down. I vote no on personal property taxes.

     
  • Jason Smith posted at 7:13 am on Sun, Feb 10, 2013.

    Jason Smith Posts: 68

    I'm sure going over budget on the courthouse is no stress, don't forget the juvenile detention should make the county money since that was the reasoning. How about when the county paid $200,000 to company to find out how underpaid the DMV employees are. Maybe Diamond parking will make up the rest by taxing the crap out of that business, I thought Sandpoint wanted growth, not punish the locals. Remember they're taxes are you paychecks elected officals. If you protest just close shop for a day or two in Sandpoint.