Valley County approves credit to Idaho Power after Supreme Court ruling on operating-property valuation

Valley County commissioners voted to issue a credit on Idaho Power's 2025 tax bill to satisfy a judgment stemming from an Idaho Supreme Court ruling that found the utility's operating property was overvalued for tax years 2020, 2021 and 2022.

The decision matters because the county must return tax dollars assessed in error and choose how that refund is distributed among local taxing districts. Treasurer Roberts told commissioners the total amount calculated for Valley County is $107,689.26, of which $20,861.33 is judgment interest and $86,827.93 is the tax refund.

Operating property — assets such as power lines and other utility infrastructure — is centrally assessed by the Idaho State Tax Commission rather than by counties. Treasurer Roberts summarized the appeal process: Idaho Power challenged the commission's valuation method, the district court affirmed the commission, and the Idaho Supreme Court reversed the district court and found the earlier valuations were too high. The tax commission provided a two-page letter summarizing the judgment and offered to meet with county officials for additional detail.

Roberts described the method used to compute Valley County's share: the tax commission provided reductions in assessed value for the three tax years; the county multiplied the difference in value by the applicable levy rates for each taxing-authority group (excluding fire districts, which do not pay operating-property tax) to calculate the county's refund share. Roberts said the tax commission and Idaho Power agreed on a method for calculating judgment interest and that interest continued to accrue until December 31 unless the county agreed to make Idaho Power whole by the end of 2025.

County officials discussed two practical options: (1) write Idaho Power a check for the refund, then recover the county's portion from affected taxing districts (either by requesting checks from them or by withholding future disbursements), or (2) issue a credit on Idaho Power's 2025 tax bill. Treasurer Roberts recommended issuing credits on the 2025 tax bills and noted the county's property-tax software makes handling the interest payment complicated. He said some neighboring counties already issued checks; others were crediting tax bills.

Commissioners expressed concern about the impact on small taxing districts if the county later sought to claw back amounts they had already spent. Roberts noted that affected taxing districts could use a judgment levy next year to recover funds if they find themselves materially harmed by the credit approach. He also said he would notify and explain the options to each taxing district.

On a motion to "approve the Idaho Power operating property judgment credit in the amount listed by Treasurer Roberts" and to defer the interest decision to the budget process, commissioners voted to approve the credit and postpone separate consideration of interest. The vote was recorded as passed.

Roberts said he will follow up with the Idaho State Tax Commission, coordinate with other counties using the same tax software, and contact local taxing districts to explain the county's chosen approach and available remedies. If the state legislature provides funding later, the county may be reimbursed for interest or other costs, Roberts said.

The county clerk and treasurer will document the accounting steps needed to implement the credit and will return to commissioners if a separate interest payment must be scheduled during the budget cycle.