That number, however, is likely to fluctuate as lawmakers begin to prepare to dive into tax policy during the 2018 legislative session — which kicks off Monday.
Ken Roberts, chairman of the Idaho State Tax Commission, first revealed the fiscal impact of the tax reform law to lawmakers during Friday’s Economic Outlook and Revenue Assessment Committee meeting.
“All told, we believe the impact on Idaho (tax revenue) will be a positive $97.4 million,” Robert said, referring to collections during fiscal year 2019 — which doesn’t start until July and goes until the end of June 2019.
The federal policy cuts tax rates and nearly doubles the standard income deduction. It also caps or eliminates some popular itemized deductions, and sets the personal exemptions to zero.
“I think the perception was that this was going to be a tax decrease,” Roberts said. “But when Idaho doesn’t have as many provisions as other states, and you eliminate the exemptions, the standard deduction only gets you so far. Then you start paying more tax.”
The Idaho Legislature typically syncs the state’s tax code with the federal version each year to make it easier for residents and businesses to do their taxes, as well as avoid having to keep separate accounting books to track the different rules.
The typically mundane request comes from the Idaho Tax Commission at the beginning of each legislative session to ensure Idaho’s definition of adjusted gross income matches the federal government’s Internal Revenue Code.
Yet this year, the issue of if and how Idaho will choose to conform has become a top priority for Idaho lawmakers. That’s because how lawmakers handle conformity will be the driving factor on how much money will be available for possible tax cuts while still ensuring education and other budget needs don’t get shortchanged.
State lawmakers are already tossing around ideas, but many of the details are not quite fleshed out.
For example, Senate President Pro Tem Brent Hill, R-Rexburg, said last month the state could consider keeping a personal exemption or offering a state child tax credit after citing concern the new state revenue would come disproportionately from larger families because of the elimination of the exemption.
Meanwhile, Gov. C.L. “Butch” Otter declined to address the topic during The Associated Press annual legislative preview on Friday and instead said he would talk about it during Monday’s State of the State address.