Bill Description: House Bill 648 would require local taxing districts to dedicate 50% of any new year-over-year increase they receive in revenue sharing from the sales tax to property tax relief.
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?
Under Idaho code, local taxing districts receive 11.5% of the sales tax revenue collected by the state. This policy is known as revenue sharing. Idaho code also places some limits on how much a local taxing district may increase its budget in a single year.
House Bill 648 amends Section 63-802, Idaho Code, in a way that could slightly reduce the rate of property tax increases.
The new language would take effect in the 2022 tax year. It says that when local taxing districts are determining how much they will increase their budgets, they must reduce the calculated property tax levied for the previous 3 years by 50% of the amount their portion of revenue sharing increased, compared to the previous year.
In other words, if a local taxing district received $1 million in revenue sharing one year and $1.1 million the next year, its starting point for calculating the budget increase would be $50,000 lower.
While this bill does have the potential to slightly reduce the rate of property tax increases, it would take many years before the change could result in any meaningful reduction in a local taxing district’s budget.
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