Bill description: HB 359 repeals all property taxes in Idaho and increases the state sales tax from 6% to 11%.
Rating: 0 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?
HB 359 repeals all property taxes in Idaho. The bill's statement of purpose argues that property taxes are a vestige of a feudal system of governing; it proposes that the state constitution be amended to prohibit them permanently.
HB 359 increases the state's sales tax from the current rate of 6% to 11%. This would make Idaho's sales tax the highest in the nation. The impact of such a high sales tax is not entirely predictable, but some possibilities include more Idahoans choosing to shop in contiguous states without sales taxes (such as Oregon and Montana) and less tourism due to the increased taxes visitors would face.
While the goal of eliminating property taxes is laudable, attempting to make such a repeal revenue neutral by increasing sales taxes by $1.8 billion could inflict economic harm on the state. If eliminating property taxes were accomplished primarily through spending cuts, a moderate increase in the state's sales tax would be more palatable.
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