Idaho Offers Businesses A Welfare Home

While Idaho legislators are looking for money in all the wrong places, the text from a Dept. of Commerce brochure is quite revealing. In short, the state and local governments are in an economic civil war with their neighbors in a battle predicated upon seeing who can give away the most.

Businesses decide where to locate based on how much they can screw the governments out of in the way of cash, tax credits, and other incentives. The intended result is always JOBS! However when the business doesn’t pay property tax for five years and can depend on getting free services, it is a recipe for financial disaster.

When businesses don’t pay taxes, the justification is always, “They create jobs and the employees pay taxes.” Truth is, the employees consume services. They poop in our sewers, fill our schools with kids, jam the roads with traffic, and create a demand for police and fire–none of which is paid by the companies that get the tax breaks.

When the housing bubble springs a leak, Idaho is at the top of the heap in foreclosures, education crises, and unemployment.

Here is what the Dept. Of Commerce offers:
Tax Incentives
Why Idaho?
Business Climate
Together with some of the lowest overall costs of doing business in the country, Idaho has a variety of incentive programs designed to assist business start-up, business expansion, and business productivity.

From financial incentives to business tax credits to worker training programs, Idaho’s incentives are designed to enhance overall profitability and make doing business from Idaho very attractive. Plus, Idaho is near the top in virtually all indicators of business and economic vitality.

Companies looking to expand into Idaho should consider:
– A reasonable income tax. Companies that manufacture and process typically pay much less than the state’s 7.6 percent corporate income tax rate. That’s because of a generous investment tax credit for capital intensive businesses. Tax credits carry over 14 years.

– No sales tax for equipment or raw materials used in food processing, manufacturing, pollution control equipment, utilities or industrial fuels.

– Idaho is third in the nation for the most reasonable property tax. Then again, there is a good chance that companies won’t pay property tax for the first five years after start up. An Idaho statute allows local counties to make that decision for manufacturing enterprises that invest a minimum of $3 million.

– The Idaho Department of Labor can offer businesses customized recruiting services as well as workforce training. Financial reimbursement up to $3,000/employee is available to eligible companies for training
new employees. Idaho’s colleges and universities also offer customized workforce training programs.

Comments & Discussion

Comments are closed for this post.

  1. A couple of things jump out here. First, note there are no amounts of relief shown. That tells me the “business” looking to re-locate is limited in the tax relief only by their ability to negotiate. Second, although it isn’t near as attractive as the brochure, it would be more truthful to simply say: Come to Idaho where we have no problem giving you our citizen’s tax money!!!

  2. The same thing is largely true at the national level. While congress is holding emergency sessions to cut NPR funding, us corps are skipping out on about 60 billion annually in taxes thanks to loopholes.

  3. Wow, that explains a LOT. Back when I worked at Directv, shortly after they opened their call center, they told us that they were very careful in how they screened applicants, and that we were the “best of the best”, because it was going to cost them around $3000 to train each of us. At the time, I wondered how on earth they could possibly afford that- the turnover rate was astounding, and around 5000 people are employed there, at any given time…guess I can see how it’s done, now. A call center would be a very, very profitable enterprise, with the right kind of “help”, and “specialized” training for your prospective cannon-fodder…er, employees! ;o)

  4. Count Me Out
    Mar 23, 2011, 7:49 pm

    The County also does this with their new-fangled “business tax exemptions.” Companies that are profit-making enterprises apply for tax exemption under a state law that allows multiple years of exemptions in exchange for I guess them bringing business here. The county commissioners agendas on the internet show recent meetings for this but never included the name of the companies applying and they show it as an executive session so I guess it’s a secret even though they’re giving away our hard earned (and much needed) tax dollars. I think we should at least know which companies are applying and on what basis they get to avoid paying taxes, since none of us get to avoid paying our property taxes! Why the heck should big business?

  5. The tax code is to blame here, its an ever changing hodge podge of city, county, state, and federal hoops and rules and exemptions and credits. Apparently kept complicated to keep us all confused. It should be scraped but that is a whole other agrument. Right now we have bills to pay, do you want to pay them or do you want your employer to pay them? Some states put the burden higher on businesses, but states like California hit the citizen hard too. Calling Idaho a Welfare Home for business is a stretch. I think attracting business with lower taxes is a good idea as long as you can still pay your bills. The key is to have discretion as to which businesses get these breaks. Moving a software design firm here makes a lot of sense you are getting a lot of high paying jobs with intelligent people and small environmental effect. I can see the long term gain in giving them a tax break. The key is the discretion. I would need better examples to comment further. And Cyclops when you cut someones taxes you aren’t “giving” them anything, you are taking less.

  6. Corporate Farms get huge tax and legal incentives to move CAFO operations to Idaho. The jobs they create are so low paid, they do not add significantly to the tax base. When they leave, a huge environmental mess is left behind.
    Most mining operations do the same.

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