Idaho Governor Calls for Eliminating Tax on Business Assets

January 8, 2013

Idaho Gov. “Butch” Otter (R) used his State of the State Address yesterday to call for repealing the state’s personal property tax. Despite its name, the tax actually applies to business assets and equipment:

Business leaders have urged lawmakers to dump the personal property tax, levied against everything from office desks to transmission lines and machinery in semiconductor factories. They say the tax prevents them from growing their businesses and hiring more workers.

To make up for the money local governments would lose out on, Otter set aside $20 million to pay cities, counties and school districts. The Republican governor also advocated giving local leaders more flexibility to raise sales or income taxes in their districts to help fund courts, public safety, education and roads.

"My preference is granting local-option taxing authority that enables county voters to decide for themselves how to address their most-pressing needs," Otter told nearly all the 105 representatives and senators.

Our review of personal property taxes found that states are increasingly moving away from this archaic tax on business investment.

More on Idaho here.

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