Idaho Tax Commission staff brief committee on how property tax levies and relief work

Kathleen Ireland, property tax research specialist with the Idaho State Tax Commission, told the Idaho House Revenue and Taxation Committee that assessed values drive levy rates but do not by themselves determine tax bills and that local budgets set the numerator in levy calculations.

Ireland gave a step‑by‑step explanation of Idaho’s assessment and levy process, saying assessors must annually assess parcels to market value with a lien date of Jan. 1 and that assessors perform field inspection on a five‑year reappraisal cycle, reviewing roughly 20% of parcels each year. She said the state Tax Commission performs annual ratio studies using roughly 26,000 sales statewide to check assessment levels.

The nut graf: Ireland emphasized that property tax in Idaho is budget‑driven — taxing districts set budgets that, after removing non‑property revenue, are divided by net taxable value to calculate levy rates — and that recent state relief from House Bill 292 and House Bill 521 altered who ultimately paid property taxes in 2023–24.

Key facts and figures Ireland presented include: the statewide total assessed value in 2024 was about $363,000,000,000 (roughly a 6% increase over 2023), residential properties accounted for about 71.3% of taxes after relief (primary residences alone about 47.8%), and total property tax levied in 2024 was about $2.2 billion. She said schools used about 20% of property‑tax‑funded budgets in 2024 and that exempt (voter‑approved) school funds — bonds and supplementals — make up roughly 92.5% of exempt funds statewide.

Ireland summarized statutory budget limits for non‑exempt funds under section 63‑802 as described in her slides: taxing districts may increase non‑exempt budgets by up to 3% (with limited additions for new construction and annexation) but are generally capped so budget growth from those sources cannot exceed an 8% increase in a year; foregone (banked) capacity may be used but with constraints, and temporary capital allowances are limited.

Committee members asked several clarifying questions. Representative Cheatham asked how the preliminary levy rate is calculated; Ireland explained it now uses current assessed values and last year’s budget (rather than last year’s levy alone), citing changes following House Bill 389. Representative Gannon asked about tax shifting if a property becomes exempt; Ireland confirmed that removing a parcel from the taxable base shifts the levy burden to the remaining taxpayers in the taxing district. Representatives Birch and Raymond asked for county‑level exemption data and the slide deck; Ireland said she had provided the materials to the committee OneDrive and offered to provide county lists of exempt parcels.

Members asked about tax treatment for very large investments. Ireland said a multi‑billion dollar data center or a large Micron expansion could apply to the local county under the investment property tax exemption referenced in statute (as described during the briefing); she explained that where developments are structured as separate taxable entities, each capped assessed value may be limited (she described the common practice of capping certain projects at assessed value levels discussed in the presentation).

Ireland reviewed recent state relief: House Bill 292 and House Bill 521 supplied homeowner tax relief and funds to pay down school supplemental and bond obligations. She said HB 292’s homeowner relief in 2023 reduced statewide property tax bills for homeowners (she cited $200 million for homeowner relief in 2023, and later changes that moved portions of relief among programs), and that HB 521 changed the distribution and reduced total statewide property tax estimates by specified percentages in 2024. Ireland also summarized long‑standing relief programs: the income‑restricted circuit breaker (up to $1,500 credit; 2025 income limit $37,810 and home‑value tests explained) and the 100% service‑connected disabled veteran $1,500 credit (no income test), and a property tax deferral program created in 2006 with eligibility and repayment terms described.

The committee approved minutes from the January 27 and January 28 meetings by motion of Representative Bruce before Ireland’s presentation. The session closed with committee members encouraged to share the Tax Commission materials with local officials.

Ending: Ireland offered to follow up with members on county exemption data and other technical questions; the committee adjourned so members could attend floor session.