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H 329

TAXATION – Amends and adds to existing law to provide certain property tax exemptions for certain utilities and to provide for a tax on rate-regulated electric companies and gas companies.

68th Legislature, 1st Regular Session (2025)

House Bill 329 shifts Idaho's utility taxes from property value to consumption, ensuring fairer taxation for electric and gas companies while maintaining local revenue.

Reported Signed by Governor on March 27, 2025 Session Law Chapter 188 Effective: 01/01/2026
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Bill Summary · H 329

Summary of House Bill 329 (H 329)

Overview

House Bill 329, titled "TAXATION," was introduced on February 25, 2025, and signed into law by the Governor on March 27, 2025. The bill is set to take effect on January 1, 2026. Its primary purpose is to amend existing property tax laws related to utilities, specifically focusing on electric and gas companies.

Purpose and Intent

The main intent of H 329 is to replace the current property tax system for rate-regulated electric and gas utilities with a tax structure based on the actual consumption of energy. This change aims to create a more equitable taxation system that reflects the usage of resources rather than the value of property owned by these companies.

Key Provisions

H 329 includes several significant amendments and repeals to existing Idaho Code:

  1. Repeal of Property Tax on Utilities:

    • The bill repeals Section 63-205B, which previously governed the assessment of operating property for electric utility companies.
    • It also repeals Section 63-602O, which outlined certain property exemptions from taxation.

  2. Introduction of Consumption-Based Taxes:

    • A new tax will be imposed on rate-regulated electric companies based on kilowatt-hours sold.
    • Similarly, rate-regulated gas companies will be taxed based on therms sold.

  3. Exemptions for Specific Uses:

    • The bill establishes provisions for exemptions from the kilowatt-hour tax for electricity used in irrigation.

  4. Assessment and Apportionment:

    • The State Tax Commission will be responsible for calculating and apportioning the new taxes among counties based on the property tax levied by eligible taxing districts.
    • The bill outlines a process for reapportioning tax revenue in the event of dissolutions or expirations of taxing districts.

  5. Effective Date:

    • The changes will take effect on January 1, 2026, allowing time for the necessary adjustments in tax collection and assessment processes.

Impact

Who Will Be Affected?

  • Utilities: Rate-regulated electric and gas companies will see a shift in their tax obligations from property-based assessments to consumption-based taxes.
  • Local Governments: The bill aims to maintain revenue neutrality for local taxing districts, meaning they should not experience a loss in revenue due to this change.
  • Consumers: The impact on utility rates for consumers will depend on how companies adjust to the new tax structure.

Fiscal Considerations

The fiscal note accompanying the bill indicates that the transition to a consumption-based tax system is designed to be revenue neutral, ensuring that local governments do not lose funding as a result of these changes.

Legislative Timeline

  • Introduced: February 25, 2025
  • Passed House: March 6, 2025
  • Passed Senate: March 19, 2025
  • Signed by Governor: March 27, 2025
  • Effective Date: January 1, 2026

Conclusion

House Bill 329 represents a significant shift in the taxation of utilities in Idaho, moving from property-based assessments to a model based on actual energy consumption. This change is intended to create a fairer tax system while ensuring that local governments maintain their revenue levels.

Compiled from official sources — confirm details with the bill’s official record.

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