Dozens of Idaho lawmakers are backing a renewed effort to cut as much as $120 million annually in taxes on business equipment.
The House Revenue and Taxation Committee voted Tuesday to debate a bill that would phase out the taxes over five years as long as state revenue grows 4 percent in each of those years.
The proposal, which would reimburse local governments for the lost property tax revenue, would not kick in until the 2010 fiscal year. Equipment bought after Jan. 1, 2008, would qualify retroactively.
Supporters say the measure, which has 32 co-sponsors including two members of House leadership and two Democrats, could be funded without relying on additional revenue from other sources or programs, a source of contention that killed a proposal last year.
"We would be paying for the bill with growth in government," committee Chairman Dennis Lake, R-Blackfoot and one of the co-sponsors, told The Associated Press on Tuesday.
Idaho businesses now pay personal property tax each year on everything from forklifts to office equipment. Companies such as J.R. Simplot, the agriculture giant, and TableRock BrewPub & Grill in Boise have demanded a repeal of the tax, saying it's hard to calculate and stunts economic growth.
Last year, the House passed a bill to eliminate as much as $100 million of the taxes, but Senate lawmakers blocked it.
That seemed to be a likely fate again for any personal property tax bill this year after the House tax committee in January rejected five measures that would have repealed millions of dollars in Idaho sales tax exemptions.
Senate lawmakers who killed last year's bill suggested that elimination of the personal property tax should depend on dumping some of those tax exemptions, thus creating additional revenue. They also favored a discussion of the personal property tax bill within the broader context of Idaho's complicated system of tax breaks.
Sen. Brent Hill, R-Rexburg and chairman of the Senate Local Government and Taxation Committee, said this year's personal property tax proposal seems to be well crafted, since it puts the plan on hold if the economy is not strong enough to bring in sufficient revenue to pay for the phaseout.
"If it gets through the House, I think there's a good chance it'll get through the committee," Hill said.