Current through September 2, 2024
Sections 63-302, 63-404, 63-3029B, Idaho Code
01.
Definitions. The following definitions apply for the purposes of the property tax exemption under Section 63-3029B, Idaho Code, and do not decide investment tax credit eligibility for Idaho income tax purposes.
a. Year in which the investment is placed in service means the calendar year the property was put to use or placed in a condition or state of readiness and availability for a specifically assigned function in the production of income.
b. Operator's Statement is the annual statement listing all property subject to assessment by the Tax Commission and prepared under Section 63-404, Idaho Code.
c. Personal Property Declaration is any form required for reporting personal property as found in Section 63-302, Idaho Code.
d. Qualified Investment means property that would have otherwise been taxable for property tax purposes and is eligible or qualified under Section 63-3029B, Idaho Code, provided that property is reported on the personal property declaration or operator's statement and is designated as exempt from property tax for two (2) years on Form 49E.
e. Qualified Investment Exemption (QIE) referred to in this rule is the property tax exemption under Section 63-3029B, Idaho Code.
02.
Designation of Property for Which Exemption Is Elected. The owner will designate the property on which the QIE is elected. The owner will make this designation on Form 49E and attach it to a timely filed personal property declaration or, for operating property, the timely filed operator's statement. The description of the property on Form 49E must be adequate to identify the property to be granted the exemption. In addition to all other steps required to complete the personal property declaration or operator's statement, the owner must provide on the personal property declaration or operator's statement the date the item elected for the QIE was placed in service.
03.
Election for Investments Not Otherwise Required to Be Listed on the Personal Property Declaration. For investments, like single purpose agricultural or horticultural structures, that are not otherwise required to be listed on the personal property declaration, the owner must list that property to elect the QIE. As with any property designated for the QIE, the owner must attach Form 49E to the personal property declaration.
04.
Continuation of Listing. For all property designated for QIE, even though that property is exempt for two (2) years, the owner must list that property on the personal property declaration or operator's statement in the initial year for which the QIE is claimed and the following four (4) consecutive years, unless that property has been sold, otherwise disposed of, or ceases to qualify pursuant to Section 63-3029B, Idaho Code.
05.
Period of QIE. The QIE will be granted for the two (2) calendar years immediately after the end of the calendar year in which the property acquired as a qualified investment was first placed in service in Idaho.
06.
Election Specificity. The QIE election provided by Section 63-3029B, Idaho Code, will be specific to each qualified item listed on the personal property declaration or operator's statement. An item that is a qualified investment, but for which there is no QIE election during the year after the "calendar year in which the investment is placed in service" in Idaho, is not eligible for the QIE.
07.
Notification by Assessor.
a. Upon Receipt of Form, the assessor will review the application and determine if the taxpayer qualifies for the property tax exemption under Section 63-3029B, Idaho Code. If the assessor determines that the property tax exemption should be granted, the assessor will notify the taxpayer and send a copy of this form or listing to the Tax Commission.
b. Upon Discovery of Changes. Upon discovering that property granted the QIE was sold, otherwise disposed of, or ceased to qualify under Section 63-3029B, Idaho Code, within the five (5) year period beginning with the date the property was placed in service, the assessor will notify the Tax Commission and the taxpayer immediately. The assessor will also provide this notification upon discovery that the owner first claiming the QIE failed to list the item on any personal property declaration or failed to file a personal property declaration in any year during this five (5) year period. This notice will include:
i. Name of the owner receiving the QIE.
ii. A description of the property that received the QIE.
iii. State whether the individual item was purchased new or used.
iv. The date the owner reported the item was first placed in service in Idaho.
v. For each item, the amount of exempt value in the first year the QIE was elected and an identification of the year.
vi. For each item, the amount of exempt value in the second year after the QIE was elected.
vii. For each item, the number of the tax code area within which that item was located.
c. Denial of the QIE. Upon review of the taxpayer's application, if the assessor determines that the property tax exemption should not be granted for all or part of the market value of any item or items, then the board of county commissioners will deny the exemption for those items. The assessor will notify the taxpayer electing the QIE and will identify the basis for the denial. The assessor's notification cancels the election with respect to those items. Upon receiving this notification, the taxpayer is then free to pursue the income tax credit under Section 63- 3029B, Idaho Code, for those items denied the QIE by the board of county commissioners. The assessor will send a copy of the notification to the Tax Commission.
08.
Moved Personal Property. In order to provide unmistakable identification of the property, certain taxpayers must send written notification by the date provided in Section 63-302, or 63-404, Idaho Code, when moving property that previously received the QIE. This notification:
a. Is required of taxpayers moving locally assessed property between counties in Idaho during the five (5) year period beginning the date that property was placed in service;
i. The taxpayers will send this notification to the assessor in the county that granted the QIE and the assessor in the Idaho county to which the property has been moved.
ii. The taxpayers must include a listing which describes the property exactly as it was described on the original Form 49E or cross references the property originally listed on Form 49E.
iii. The assessor receiving such notification will forward it to the Tax Commission.
b. Is not required of taxpayers when the property is Tax Commission assessed non-regulated operating property.
09.
Partial-Year Assessments. Property assessed based on a value prorated for a portion of the year in which the property is first placed in service may still be eligible for the QIE in the subsequent two (2) calendar years, provided the QIE is elected.
10.
Limitation on Amount of Exemption.
a. New Property. The QIE will be for the full market value for assessment purposes for new property that is a qualifying investment.
b. Used Property. The QIE for used property placed in service during a taxable year for income tax purposes will be limited. For each taxpayer, the QIE will be the lesser of the QIE cost or the current year's market value in accordance with the following procedure:
i. QIE cost will be determined for each item of used property upon which the QIE is claimed. QIE cost is the lesser of an item's cost or one hundred fifty thousand dollars ($150,000); provided, however, that the QIE cost for all elected used property will not exceed one hundred fifty thousand dollars ($150,000) in a taxable year. In the event the cost of one (1) or more items of used property exceeds one hundred fifty thousand dollars ($150,000), QIE cost will reflect the reduction necessary to stay within the one hundred fifty thousand dollar ($150,000) limit (See IDAPA 35.01.01, "Income Tax Administrative Rules," Rule 719 for information on the selection of items of used property).
ii. For each item purchased used, the QIE will be limited to the lesser of the QIE cost or the current year's market value.
c. Used Property Placed in Service by Fiscal Year Taxpayer. If a taxpayer had a fiscal year beginning July 1, 2004, and placed one hundred fifty thousand dollars ($150,000) of qualifying used property in service on May 15, 2004, and an additional one hundred fifty thousand dollars ($150,000) of qualifying used property in service on August 1, 2004, the taxpayer would qualify for an exemption of up to three hundred thousand dollars ($300,000) on this used property in 2005 and 2006. The exempt value in the second year of the exemption could not exceed the lesser of three hundred thousand dollars ($300,000) or the (depreciated) market value of this used property.
11.
Multi-County Taxpayers.
a. Except taxpayers electing QIE for property that is Tax Commission assessed operating property, any taxpayers electing the QIE for properties purchased new must indicate on Form 49E the county where each property is located or must complete a separate Form 49E and attach it to the personal property declaration submitted to each county.
b. Except taxpayers electing QIE for property that is Tax Commission assessed operating property, any taxpayers electing the QIE for properties purchased used must attach any Form 49E listing property purchased used to the personal property declaration sent to each county. A Form 49E may be provided to comply with this requirement.
c. Any taxpayers electing QIE for property that is Tax Commission assessed non-regulated operating property and purchased new or used must indicate on Form 49E each county where each property is located and attach it to the operator's statement.
d. If multiple Form 49Es are submitted to one (1) or more assessors, a copy of each Form 49E must be attached to the correct year's income tax return.
12.
Special Provisions for Non-regulated Operating Property.
a. For non-regulated operating property, the market value of the QIE is calculated by multiplying the depreciated original cost of the property times the ratio of the correlated value determined under Subsection 405.08 of these rules to the cost approach value determined under Subsection 405.02 of these rules.
b. The following special provisions apply for the reduction in market value of non-regulated operating property resulting from QIE being elected.
i. Reduction in Idaho value. For non-regulated operating property except situs property, the reduction in market value will be made by subtracting the market value of the QIE from the allocated Idaho value before apportionment to any taxing district or unit.
ii. Reduction in market value of situs property owned by non-regulated operating property companies. For situs property owned by non-regulated operating property companies, the reduction in market value will be made by subtracting the market value of the specific investment in the specific location.
13.
Cross Reference. For more information relating to procedures and requirements for QIE, refer to Section 63-3029B, Idaho Code, and IDAPA 35.01.01, "Income Tax Administrative Rules," Rule 719. For information relating to recapture of QIE, refer to Rule 989 of these rules.
Effective July 1, 2024
