House committee votes to repeal business tax trio 

The House Revenue and Taxation Committee last week voted to repeal three existing tax incentives for Idaho businesses.
The first incentive on the chopping block, the Corporate Headquarters Incentive Act of 2005, has outworn its welcome, according to Rep. Dennis Lake, R-Blackfoot.
“I thought at the time it would not pay for itself, and I have not changed my opinion,” Lake said.
Keeping the incentives could have unintended consequences along with those being offered to Areva, he said.
Both the House and Senate have approved legislation that would cap the net taxable value of a new power plant at $400 million, provided the capital investment to build the project was at least $1 billion. The bill is intended to give the French nuclear energy firm Areva an incentive to build a uranium processing facility near Idaho Falls.
The legislation, which awaits the governor’s signature, is actually a better deal than the property tax exemption Micron Technology currently has, which sets the cap at $800 million.
The committee also approved repealing the 5 percent tax credit for research and development, and, after considerable debate, approved repealing the tax credit for broadband equipment.
The broadband investment tax credit was intended to create high-speed Internet connections for people living in rural Idaho.
Rep. Wendy Jaquet, D-Ketchum, made a motion to amend the bill instead of repealing the tax credit.
Broadband access is tied to economic development, and some communities still don’t have it, she said.
Rep. Robert Schaefer, R-Nampa, offered a substitute motion to repeal the tax incentive.
“Remote areas get better access by satellite,” he said. “I don’t think it’s necessary to continue incentives for the final mile.”
Rep. Ken Roberts, R-Donnelly, then introduced a third motion to hold the bill in committee. He said there would be minimal impact from waiting.
Rep. Lenore Barrett, R-Challis, supported Roberts’ motion. 
“My district is rural,” she said. It doesn’t hurt to hold it one more year.”
The committee ultimately voted against holding the bill in committee, and instead voted to recommend the full House repeal the broadband tax incentive.
The last repeal considered by the committee was the 5 percent tax credit for companies engaged in research and development.
The tax credit was created in 2001, and costs the state about $1.4 million a year, Lake said.
Dan John, a representative of the Idaho State Tax Commission, said he didn’t know how many Idaho companies have used the credit. 
No one from the business community testified for or against repealing the R&D credit.
“I’m surprised no one is here to talk about what purpose is being served,” Rep. Nicole LeFavour, D-Boise, said.
Alex LaBeau, president of the Idaho Association of Commerce and Industry, happened to be at the hearing and was asked if he would like to testify.
“We have not taken a position on this legislation,” LaBeau said. “Another bill is pending that is of more interest to our membership.”
The committee then voted to repeal the R&D credit.

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