Current through August 31, 2023
Section
63-602L, Idaho Code
01.
Definitions. The following
definitions apply to the exemption for certain intangible personal property.
(3-31-22)
a. Contracts and contract rights.
Contracts and contract rights are enforceable agreements, which establish
mutual rights and responsibilities, and rights created under such agreements.
Contracts and contract rights do not include tax credits received by low-income
housing properties under Section
42 of the Internal Revenue Code.
(3-31-22)
b. Copyrights. Copyrights
are rights granted to the author or originator of literary or artistic
productions, by which he or she is invested with the sole and exclusive
privilege of making, publishing or selling copies for a specified time.
(3-31-22)
c. Custom computer
programs. Custom computer programs means those programs defined in Section
63-3616, Idaho Code.
(3-31-22)
d. Customer lists.
Customer lists are proprietary lists containing information about a business
enterprise's customers. (3-31-22)
e. Franchises. Franchises are special
privileges. (3-31-22)
f. Goodwill.
Goodwill is the expectation of continued public patronage of a business.
Goodwill is the ability of a business to generate income in excess of a normal
rate due to such things as superior managerial skills, superior market
position, favorable community and customer reputation and high employee morale.
(3-31-22)
g. Licenses. Licenses are
permissions to do acts, which are not allowed without such permissions.
(3-31-22)
h. Method A. Method A is
the method by which the value of exempt intangible personal property is
excluded from the value of operating property by subtracting the market value
of exempt intangible personal property from the market value of the operating
property at the system level. (3-31-22)
i. Method B. Method B is the method by which
the value of exempt intangible personal property is excluded from the value of
operating property by subtracting the market value of exempt intangible
personal property from the market value of the operating property at the state
level. (3-31-22)
j. Method C.
Method C is the method by which the value of exempt intangible personal
property is excluded from the value of operating property by using valuation
models which value only the non-exempt assets. (3-31-22)
k. Patents. Patents are grants from the
government conveying and securing the exclusive right to make, use and sell
inventions. (3-31-22)
l.
Rights-of-way which are possessory only and not accompanied by title.
Rights-of-way, which are possessory only and not accompanied by title, are
easements by which grantees acquire only the rights to pass over or to access
for installation or maintenance, without acquiring exclusive use of the
rights-of-way. (3-31-22)
m.
Trademarks. Trademarks are marks of authenticity, through which products of
particular manufacturers or vendible commodities of particular merchants may be
distinguished from those of others. (3-31-22)
n. Trade secrets. Trade secrets are formulas,
patterns, compilations, programs, devices, methods, techniques or processes,
deriving independent economic values from not being generally known by other
persons who can obtain economic values from disclosure or use. Trade secrets
are the subjects of efforts that are reasonable to maintain secrecy.
(3-31-22)
02.
Tangible Property Value Not Affected by Intangible Personal Property
Value. The values of the exempt intangible personal properties will not
affect the values of any tangible properties or the value of the attributes of
any tangible properties, regardless of the role of the intangible personal
properties in the use of the tangible properties. The exempt values will not
include any values attributable to availability of a skilled work force,
condition of surrounding property, geographic features, location,
rights-of-way, accompanied by title, view, zoning, and attributes or
characteristics of real properties. (3-31-22)
03.
Operating Property Election,
Reporting and Methods. The following apply to operating property for the
identification of valuation methods to be used by the Commission, election of
Method A, Method B or Method C by the property owners, reporting by owners and
valuation using Method C. (3-31-22)
a.
Identification of valuation methods. When the Commission mails the blank
Operators' Statements to the property owners, the Commission will identify
proposed changes in valuation methods compared to those relied on in the prior
year. (3-31-22)
b. Election
default. In the event of default of the taxpayer to make an election, the
Commission will use the method proposed in the notice accompanying the
Operator's Statement. (3-31-22)
c.
Election of exclusion method. When submitting the Operator's Statement, the
owner has the right to elect the method for exclusion of the values of the
exempt intangible personal properties from the operating property value.
(3-31-22)
d. Amending Election. An
owner may amend the elected method if written notice is received at least seven
(7) business days prior to a hearing under Rule
407 of these rules.
(3-31-22)
e. Reporting. The
Commission will consider the value and supporting data provided by the owners.
If no supporting intangibles valuation information is provided by the owners,
known exempt intangible personal property will be subtracted or will not be
impounded in the value. (3-31-22)
f. Valuation using Method C. When the owner
elects Method C, the Commission will give primary consideration to the cost
less depreciation model, without regulatory adjustment, in valuing tangible
personal property and non-exempt intangible personal property. Only if this
model fails to produce market value of the tangible personal property and
nonexempt intangible personal property, will the Commission consider other
appropriate valuation models. (3-31-22)
04.
Personal Property Reporting for
Locally Assessed Property. The exemption for custom software, contracts
and contract rights will be claimed by scheduling such property on the owner's
personal property declaration form. (3-31-22)
05.
Cross Reference. For
clarification of contracts and contracts rights, see Brandon Bay, Ltd.
Partnership v. Payette County, 142 Idaho 681, 132 P.3d 438 (2006).
(3-31-22)
