Bill Would Tax Geothermal in Idaho, Wind Power the Same
Posted on: Monday, 10 March 2008, 03:00 CDT
By Carlson, Brad
A proposal before the Idaho House of Representatives would require counties to tax geothermal power projects the same as they tax wind projects - based on production revenue.
House Bill 529 also aims to clarify the definition of machinery and equipment used by renewable energy production facilities, and to clarify what equipment is exempt from sales tax.
The House Revenue and Taxation Committee on Feb. 21 voted to send the bill to the House under general orders for amendment, committee Secretary Marsha Palmer said. The amendment clarifies that "machinery and equipment" includes all operating property.
She said House Bill 529 will not come back to the committee. House members, meeting at ease, will consider this bill and others on the general-orders list at a date to be determined. They can change the bills before sending them to the House floor for second reading, she said.
When the House Revenue and Taxation Committee first took up the proposal Feb. 18, members said definitions of operating property should be clarified.
Idaho State Tax Commission officials, in response to a question at the initial meeting by Rep. Nicole LeFavour, D-Boise, said they didn't expect the legislation to impact the definition of personal property.
The bill would not impact the Idaho General Fund, according to the bill text. But Tax Commission Policy Supervisor Dan John said it would have a fiscal impact if it exempts from sales tax some items that now are not exempt.
Centra Consulting Inc. and U.S. Geothermal propose the bill.
U.S. Geothermal's Raft River LLC production facility south of Burley now pays property taxes on the improved property, Stephen West of Centra Consulting said in an interview. House Bill 529 would exempt such facilities from property tax, and instead impose a 3 percent production tax on revenue from energy production. The energy production tax revenue would go to counties.
"It improves the economic model for existing facility expansion or new facilities, and provides the means to recover some of the enormous capital costs associated with these types of projects," he said. The operator would pay the county from realized revenue rather than from property taxes up front, he said.
Credit: Brad Carlson
(Copyright 2008 Dolan Media Newswires)
(c) 2008 Idaho Business Review, The. Provided by ProQuest Information and Learning. All rights Reserved.
Source: Idaho Business Review, The
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