Summary of Idaho House Bill No. 388 (H 388)
Aims, scope, and timeline
- Bill introduced: March 10, 2025
- Status: Reported Printed and Referred to Revenue & Taxation
- Purpose: Establish the County Property Tax Relief Act, authorizing counties to seek voter approval for a county transient room tax (TRT) of up to 3% on lodging sales. Revenues would fund property tax relief for county homeowners, with the remainder supporting public safety services. The bill also revises duties of short-term rental property owners and includes an emergency clause with an effective date.
What the bill would do
- Create the County Property Tax Relief Act (new Chapter 26, Title 63, Idaho Code).
- Allow counties to adopt a TRT up to 3% with voter approval (majority of votes in a county election).
- Direct revenues to a County Property Tax Relief Fund, with allocation requirements, and to support specified public safety services.
- Establish a framework for administration, use, and distribution of TRT revenues, including oversight by the State Tax Commission.
- Amend existing provisions related to duties of short-term rental property owners (Section 63-1804) and make technical corrections.
Key definitions (63-2603)
- “County transient room tax” = tax on lodging sales (hotels, motels, short-term/vacation rentals, campgrounds).
- “Sale” = renting a place to sleep for less than 31 days (excluding certain exceptions, e.g., Idaho Ronald McDonald House).
- “Short-term rental” / “Vacation rental” = dwelling units rented for 30 days or less.
- “County property tax relief fund” = fund created by a county to reduce county property tax budgets.
- “Sale”’s scope includes lodging charged to visitors; occupancy by residents is not the focus unless part of the TRT collection.
How revenues would be used (63-2605, 63-2606)
- Exact tax details and duration must be set by county ordinance prior to collecting TRT.
- A minimum of 50% of TRT revenues must be used for property tax relief for county homeowners.
- Remaining revenues may be used for:
- Public safety services: law enforcement, search and rescue, emergency medical services (EMS), and fire protection.
- Ambulance service districts and fire protection districts may receive an apportionment for EMS and fire services within the county.
- Distribution method:
- Quarterly apportionment to the county and districts, based on each district’s current nonexempt property tax budgets relative to the total in the county.
- If districts are in multiple counties or consolidated, distributions are adjusted accordingly.
Administrative and collection framework
- TRT collection, administration, and distribution would be handled by the State Tax Commission (as noted in the act’s caption and scope).
- Counties must adopt ordinances specifying the tax rate, purpose, percentage for property tax relief (minimum 50%), and duration before collecting the tax.
Fiscal note overview
- Estimated statewide impact if all counties adopt a 3% TRT: about $32.6 million annually.
- At least $16.3 million would fund property tax relief; approximately $16.3 million would support public safety services (law enforcement, EMS, search and rescue, fire protection).
- No anticipated impact on the state General Fund.
Affected parties
- County residents (homeowners) who would benefit from property tax relief.
- Visitors and lodging providers (hotels, motels, vacation rentals, campgrounds) subject to TRT.
- Short-term rental property owners (duties revised under 63-1804).
- Public safety districts (ambulance and fire protection districts) receiving funds via apportionment.
Procedural/timeline notes
- Election mechanism: TRT approved by a county electorate on an election date following the first Tuesday after the first Monday in November; if approved, the county can implement the tax.
- No TRT proposal for 11 months after an approval/disapproval vote.
- Emergency clause present; the act provides an effective date upon enactment per the emergency declaration.
