Bill Description: House Bill 388 would allow counties to establish a local option sales tax on hotels, motels, vacation rentals, and private campground rentals. Half the tax revenue would go to property tax relief and the other half would be used to grow government. 

Rating: -3

Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?

House Bill 388 would create Chapter 26, Title 63, Idaho Code, to allow counties to establish a local option sales tax on hotels, motels, vacation rentals, and private campground rentals.

This tax could be up to 3% of the charge for "renting of a place to sleep to an individual by a hotel, motel, short-term rental, vacation rental, or campground for a period of less than thirty-one (31) continuous days."

County voters would have to approve such a tax before it was adopted.

Half of the tax revenue generated by the local option tax allowed under this law would go to property tax relief. The bill says, "Any county assessing a tax pursuant to this chapter shall create and establish in the office of the county treasurer a county property tax relief fund." The money in this fund would be used to "reduce the property tax portion of the county's budget" and would "be designated as a line item credit against the total of county property taxes on the property tax bill for each property owner paying county property taxes in the year such moneys were applied."

(-1)

Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth?

The "legislative findings" section of this new law says, "The legislature finds that it is equitable to shift this tax burden in part from residential property owners in a county to the visitors utilizing county services."

This claim ignores the fact that the property owners who are renting space to the visitors already pay property taxes (and other taxes) to cover the "county services" these visitors may use. 

Even if this plan worked as claimed, creating a new tax on one group of people to reduce the tax burden of another group is quintessential government redistribution of wealth. 

(-1)

Does it create, expand, or enlarge any agency, board, program, function, or activity of government? Conversely, does it eliminate or curtail the size or scope of government?

Only half of the tax revenue generated by the local option tax allowed under this law would go to property tax relief. The other half would go to expand government services, including "law enforcement services, search and rescue services, emergency medical services, fire protection services," and "ambulance service districts and fire protection districts in the county."

(-1)