Melissa Davlin reports: For years, Idaho’s business community has lobbied the Idaho Legislature to repeal the personal property tax.

In the months leading up to the next legislative session, that movement is once again gaining traction.

Personal property tax includes a business’ moveable property, such as desks, office supplies, clothing racks, bookshelves, art and machinery.

How would a repeal affect Idahoans? It depends on who you ask.

The Business Owners

What does it take to account for every office supply, every piece of medical equipment, every tool?

A big time commitment, said Shawn Barigar, president and CEO of the Twin Falls Area Chamber of Commerce.

“What we’ve heard from our business members is it takes a tremendous amount of time to track the specific items that end up being accounted for in the personal property tax,” Barigar said. “At the end of the process, it truthfully doesn’t generate a whole lot of dollars.”

While the chamber hasn’t yet had its meeting about legislative priorities, “it’ll certainly be something we discuss at length,” Barigar said.

The tax doesn’t just affect business owners currently set up in Idaho, said Nathan Lyda, president-elect of the Idaho Association of Realtors. Some surrounding states, including Utah, don’t have the tax, which may affect businesses’ decisions on where to locate.

“It’s about growth in Idaho,” he said.

And that affects everyone, including real estate agents with property to sell, Lyda said.

In 2008, the Realtors association called it “the most hated tax in the state by those who pay it.” That position hasn’t changed, Lyda said.

“Our association feels that it is a barrier to economic development,” he said.

The Local Governments

The problem with repealing a tax: Government needs money to operate, and if that money isn’t replaced, taxing districts may struggle.

Right now, it’s difficult to estimate how big the impact of a repeal might be, said Gooding County Commissioner Helen Edwards.

“There are so many variables,” she said.

First, the Legislature needs to define personal property tax. For example, the Gooding County assessor classifies milk equipment in a barn as actual property, Edwards said, because it’s bolted to the floor.

But if the Legislature defines that bolted-down machinery as personal property, the county will take a bigger hit.

“If they say it’s personal property, that’s going to make a real difference,” she said.

Then there’s the question of whether the state will allow districts to replace revenue. Even if they’re allowed to increase taxes elsewhere, Edwards pointed out that Idaho taxing districts have levy limits.

The burden will be felt differently depending on the taxing district. Taxing districts that contain large quantities of public land, like Power County, rely more heavily on personal property tax collections than areas with more developed or agricultural land.

In 2012, the city of Twin Falls collected $954,953 in personal property taxes, nearly 6 percent of its property tax collections.

The Twin Falls Urban Renewal Agency also benefitted from personal property tax collections, receiving $178,405 in 2012.

Future personal property tax collections would go up when Chobani opens, according to a letter from the city of Twin Falls to Senate President Pro Tem Brent Hill. When Chobani is added to the tax rolls, its personal property will provide an estimated $1.2 million in tax collections.

The Lawmakers

In August, Senate President Pro Tem Brent Hill, R-Rexburg, sent a letter to Idaho taxing districts asking how a personal property tax repeal would affect revenue and services.

“My purpose in sending out the letter was not to encourage or discourage elimination of the tax,” Hill said in a Monday interview. Rather, he hoped to gather as much information as possible to educate lawmakers on the issue.

Some are already familiar with the topic. House Assistant Majority Leader Scott Bedke, R-Oakley and a member of the House tax committee, said repealing the personal property tax has come up multiple sessions in a row.

“It’s deja vu all over again,” Bedke said.

The difference this time: Many of the lawmakers considering this new legislation will be new to the Statehouse. Between redistricting and retirements, the Legislature may see as much as a 40 percent turnover in its ranks in January.

During the 2012 session, a group of lawmakers attempted to solidly define personal property, debating intricacies like whether to include machinery bolted to the floor, or utilities.

But many of those who worked on those definitions are no longer in the Legislature, Hill pointed out. Rep. Dennis Lake, R-Blackfoot and chairman of the House Revenue and Taxation Committee, retired this year; Sen. Tim Corder, R-Mountain Home, lost his May primary race; House Caucus Chairman Ken Roberts, R-Donnelly, stepped down this summer after being appointed to the Idaho State Tax Commission.

Bedke said he wants to repeal the tax, but acknowledged there are difficulties. Some counties with huge chunks of public land depend largely on personal property tax revenue for their budgets. Should the state force them to cut their budgets, replace that money with state general fund dollars, or allow them to shift the tax elsewhere?

There’s no easy answer, Bedke said, and there hasn’t been for years.

“I’m certainly willing to listen to any of the new ideas,” he said.