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Bill to cut income tax moves to House floor

Posted at 1:03 PM, Jan 12, 2022
and last updated 2022-01-19 11:01:00-05

BOISE, Idaho — The House Revenue and Taxation Committee voted Tuesday morning to send a bill that would provide income tax relief to the House floor with a recommendation that it pass.

Testimony at a house committee meeting Tuesday was split between lobbyists sharing the positive impact the bill would have on Idaho businesses and Idaho residents sharing why they thought the bill would not benefit low-income Idahoans, a group they say needs the tax cut most.

When it came to lawmakers on the committee, the vote was split along party lines, with Democrats against the bill and Republicans for it.

Democratic Rep. Lauren Necochea of Boise said Idahoans have not told her they want income tax relief, but they have asked for property tax relief and for the grocery tax to be repealed.

"This is not the priority of Idahoans and it is just too lopsided," she said.

This bill would consolidate income tax brackets from five to four, would cut the corporate income tax rate from 6.5% to 6%, and offer a one-time rebate for all Idahoans who filed income taxes in 2020.

The rebate would be 12% or $75, whichever is higher.

Democratic lawmakers argue these changes are lopsided because--they say--it would benefit the wealthiest Idahoans.

Democratic Rep. James Ruchti expressed concern about having the money to fund other priorities if this bill is passed.

"My big concern is that right out the gate, we're making a decision that $600 million dollars is headed this direction and we're not going to be able to claw it back once we make that decision," he said.

One of the sponsors of the bill, majority leader, Rep. Mike Moyle of Star said there's enough money to go around.

"We have enough money to do it all," he said. "I myself and some of the members of this committee are working on many bills, several dealing with property taxes. I think that we need to address property taxes and there's ways we can do that."

Moyle said this bill is ready now, so lawmakers should go ahead and pass it then move on to other priorities like property tax relief.

The vote Tuesday was ultimately along party lines with only the two democrats on the committee voting not to advance the bill, but one Republican committee member did express concern.

"I've had zero people ask me for this type of income tax reduction but I have had many people ask me in regards to property tax and grocery tax reform and repeal," Republican Rep. Tammy Nichols of Middleton said.

She ultimately voted in favor of the bill, but said she reserves the right to change her mind if the bill makes it to a vote in the house.

The legislation was introduced last Wednesday in the House Revenue and Taxation Committee.

The Idaho Press reports the House committee moved with unusual speed to get it introduced on the third day of the session. Idaho Gov. Brad Little outlined the proposal in his State of the State address earlier this week.