Idaho would lose out on more tax revenue in the coming fiscal year under the latest federal conformity bill introduced Thursday.
Under House Bill 559, the cost of mirroring federal tax changes passed last summer, like breaks on tips, overtime and car loan interest, would be $155 million in this fiscal year. That climbs to $175 million starting with the new fiscal year in July.
Rep. Jeff Ehlers (R-Meridian), who sponsors the bill, said his calculations come in around the midpoint of other projections made by local and national tax groups.
Rep. John Gannon (D-Boise) is one lawmaker who said he believes the fiscal analysis is too optimistic. Gannon pointed to estimates in neighboring Montana that are significantly higher.
“Montana’s got one-third of the population of Idaho. So if you extrapolate, you’re looking at $200 million to $300 million," he said.
And that's solely on the personal income tax side, according to Gannon. Corporate income changes would add further to that figure.
Ehlers said he stands by his estimate, calling it defensible.
He says the cost of not conforming to the federal changes, like tax breaks on tips and overtime, would leave regular Idahoans with less money in their pockets.
“For a working waitress, I think that benefit is like $1,500. For a working class, blue collar [person] working overtime, $500 to $600 for them,” Ehlers said.
The fight over tax conformity comes as the Joint Finance and Appropriations Committee is looking for tens of millions of dollars in further cuts to the state budget in the current and upcoming fiscal years.
Ehler's bill could receive a public hearing as early as next week.
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