Idaho lawmakers pitch major cut to property taxes, but there is a trade-off

A new idea pitched at the Idaho statehouse is to eliminate property taxes to help Idahoans struggling to keep up.

House Bill 741 would remove all property tax other than voter-approved bonds and school levies from primary residences that receive the homestead exemption, that is the technical name of the homeowner’s exemption.

The bill would also raise the grocery tax credit by $75, from $100 up to $175 per person. The tradeoff comes with a sales tax increase of 1.85%. That would increase the sales tax from 6% to 7.85%, with a portion of that going to local taxing authorities who currently collect property taxes.

“It will help keep people in their homes in Idaho. It’ll help our elderly. It’ll help people who are trying to buy a new home. It does shift the burden a little bit over to the sales tax, but it’s a tax you can avoid if you choose to,” said bill co-sponsor, House Majority leader, Republican Rep. Mike Moyle.

Rep. Moyle is co-sponsoring the bill with Senator Jim Rice. Moyle says the idea is to shift taxes in a manageable way for homeowners struggling with property taxes.

“It does benefit, especially our elderly. Think about your grandmother. She’s not spending a whole lot on sales tax. Now, all of a sudden, her property tax is going to go down 70, 80%. That’s huge to them. It will help keep them in their homes, and at the same time, it will help those who are just starting out, be able to afford a home,” Moyle said.

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