Much is now known about the current state of personal property tax in Idaho. We reported on the top revenue losing cities, should the Legislature eliminate the business property tax. Data dumps from the Idaho State Tax Commission and from the Idaho Center for Fiscal Policy delivered raw numbers on the ways that local governments rely on the personal property tax and who pays it. And StateImpact Idaho has helped visualize the effects of repeal on counties, listing the top five personal property tax payers in each county.
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In December, Democrat Grant Burgoyne suggested that some type of local taxing authority could replace the $140 million in lost tax revenue that a repeal would cost local governments. Governor Butch Otter agreed in his State of the State that he would support some type of “broad” local option tax as well. The most frequently discussed local option tax—perhaps the easiest to pass—is a local sales tax.
Boise State graduate assistant April Hoy, working with the Environmental Finance Center, took a look at what kind of sales tax hikes counties would need to implement to make up for lost property tax revenue. Fifteen of Idaho’s 44 counties would need to raise sales tax by more than 2 cents on the dollar, on top of Idaho’s state sales tax rate of 6 percent.
Almost a dozen counties would need to increase their sales tax rates to 8 or 10 percent. But in the case of Power County, widely reported as the county most dependent on personal property tax, sales tax would need to rise to 27 cents on the dollar to make up for the loss.
Hoy produced the map below using Tableau Public. If you hover over each county, you can view the total amount of personal property tax collected and the sales tax base for 2012. You can toggle the map between county government values and the total value of all local governments within the county. It is interesting to compare this map to the StateImpact map; some counties, like Boundary County, for example, stand to lose a lot from a property tax repeal, but could make up for it with a relatively robust sales tax base.
The views and opinions expressed here are those of the writer and do not necessarily reflect those of Boise State University, the Center for Idaho History and Politics, or the School of Public Service.