Merchants see relief on tax bills

SANDPOINT — Business owners in Bonner County are encountering a pleasant surprise with their tax bills this year.

Property tax bills that are currently being issued reflect a change in Idaho law that allows businesses to exempt the first $100,000 of their personal property taxes.

Some business owners are seeing “no tax due” notices for that category of taxation or are seeing reductions by as much as $1,400, leading to a steady stream of inquiries at the Bonner County Treasurer’s Office.

“They’re calling, wondering if we made a mistake,” said Treasurer Cheryl Piehl.

But there is no mistake, thanks to Idaho lawmakers who put the exemption into effect earlier this year.

The exemption took effect in April, although it’s the first time business owners are seeing it reflected on their tax notices.

“It’s kind of fun to tell people that they don’t owe any money for once rather than asking for money,” said Piehl.

Businesses still pay taxes on structures and land, and if their homes or the difference in value if over $100,000 for personal property, according to Piehl.

Idaho business interests called the tax requirement burdensome and advocated for the elimination, contending it make them more competitive.

But the exemption threatened to cause a shortfall in the county’s budget. In 2012, the county received nearly $1.2 million personal property tax, according to the Idaho State Tax Commission.

The lost revenue created the potential for an increase in other forms of taxation, although Piehl said the state has agreed to reimburse taxing districts in Bonner County approximately $631,863, a figure which will be refined once possible tax appeals and adjustments settle out.

The no-tax-due notices will not be mailed next year as awareness of the exemption grows, Piehl said.

But for now, the treasurer’s office, which is viewed by some as the Grinch that stole Christmas, is enjoying the positive response from the public.

“People are normally in shock because their bill went up, not because it went down or to zero,” Piehl said.