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Tax breaks for dorm builders faces Senate vote

Tax breaks for dorm builders faces Senate vote

by
Idaho Freedom Foundation staff
March 16, 2010
Idaho Freedom Foundation staff
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March 16, 2010

The Senate Local Government and Taxation Committee Tuesday approved a tax break that would help Boise State University, but rejected a tax rebate for airplane repair parts that would benefit another Boise business.  Both tax breaks were approved without opposition by the House.

The panel approved legislation that would let BSU contract with a private company in Texas to build an additional student dormitory on campus without paying property tax.  That company, American Campus Communities (ACC), would pay to build the student housing and have a 65-year lease to operate the building.  "It’s a long-term contract, but they can’t charge any more than what the competitive rates are for student housing on campus,” said Bruce Newcomb, BSU's director of governmental affairs.  Newcomb is also the former Idaho House speaker.  “I think it’s an ingenious idea.”  The property tax exemption proposed by Newcomb could apply to construction projects on any state university or college in Idaho.

The Senate committee rejected a tax rebate for repair parts used for airplanes owned by out-of-state residents.  The rebate was supported by Western Aircraft, a repairing and fueling company that operates out of fives hangars at Boise Airport.  “The airplane repair tax in Idaho unintentionally gives our competitors an advantage,” said Al Hoyt with Western Aircraft.  Idaho collected $192,753 in tax revenue that could have been eligible for the rebate.  Hoyt said getting the rebate would help the company fend off competitors and continue its planned growth.  “We will attract more business.  It will ensure that Western Aircraft can compete more fairly.”

“Idaho is an easy fly-by,” said Don Dietrich, director of the Idaho Department of Commerce, who supported the measure.  “This is about jobs for me ... This is about growth.”

But lawmakers on the panel voted 5-3 against the tax rebate.  Sen. Joe Stegner, R-Lewiston, said the rebate was creative and well-crafted, but that the lean state budget means  he can’t support further tax breaks.  “I can’t in good conscience this year vote against a sales tax exemption for shelter homes and turn around and make a vote for out-of-state jet owners,” Stegner said.  The same committee killed a proposed sales tax exemption for homeless shelters earlier this session.  “It’s not something I can justify in my mind.”

The property tax exemption to help build new student housing at BSU now heads to the Senate floor. Read IdahoReporter.com’s story on the added BSU beds here, and the airplane tax rebate here.  The text of the legislation is available hereThe text of the failed airplane tax rebate is available here.

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