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IdahoH 03292025 regular legislative sessionHouseWALLET

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.

Sponsored By: REVENUE AND TAXATION COMMITTEE

Signed by Governor

TAXATION

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Bill Overview

Analyzed Economic Effects

7 provisions identified: 3 benefits, 1 costs, 3 mixed.

Irrigation pumpers get electricity tax relief

Electricity used to pump irrigation or drainage water on Idaho land qualifies for a refund or bill credit. The benefit equals $0.000923 per qualifying kilowatt-hour. Electricity used to pump water sold or rented for irrigation does not qualify. Pumpers who are not utility customers must apply to the Idaho State Tax Commission by April 30 each year. Those applicants must pump the water themselves, not merely distribute or resell electricity.

Counties receive utility taxes for local governments

The Idaho State Tax Commission must notify county treasurers of their utility-tax shares by the third Monday of May. It sends counties their shares promptly after receiving utility payments. County auditors must notify eligible districts, local units, and urban renewal agencies by the fourth Monday of July. They must pay those entities by the fourth Monday of August, subject to receipt of the utility taxes.

Operating-property owners get automatic tax exemptions

Operating-property assessments that depart from market value to comply with federal law or precedent are treated as tax exemptions. The Idaho State Tax Commission must identify the departure in its appraisal. Property owners do not need to apply for this exemption.

Utilities face filing deadlines and late penalties

Starting in 2027, covered utilities must report prior-year Idaho sales and allocation data by April 15, including electric pumping usage. Without a report, the Idaho State Tax Commission uses the best available information to calculate sales. The Commission calculates taxes, applies irrigation reductions, and bills utilities by the fourth Monday of May; payment is due June 30. Unpaid taxes incur a 5% penalty plus 1% monthly interest from June 30 and become liens on company property. Counties enforcing payment can also recover reasonable prosecution costs.

Energy taxes appear on customer bills

Beginning January 1, 2027, covered electric and gas companies must include applicable energy taxes on Idaho customer bills. The Idaho Public Utilities Commission must adjust base rates where they already recovered operating-property taxes or the new energy taxes. The net bill change depends on the tax and rate adjustment.

Local utility revenue follows 2025 tax shares

The Idaho State Tax Commission divides utility tax revenue among counties using eligible 2025 property taxes and allocations. County auditors must certify those amounts by January 12, 2026. Districts and revenue allocation areas formed after January 1, 2025, cannot receive these distributions. Consolidated districts keep the combined distributions of their former districts. Local shares are redistributed the following year after a qualifying district or allocation area disappears, or a qualifying voter-approved bond expires. Those changes do not alter county shares or utility billing proportions. Distributed taxes count as property-tax revenue under state levy limits.

Utilities trade property taxes for energy taxes

Beginning January 1, 2026, qualifying electric and gas utility land, fixtures, and equipment are exempt from property tax. Covered uses include generating, transmitting, distributing, delivering, or measuring electricity or gas. Replacement taxes apply to Idaho retail sales: $0.000923 per kilowatt-hour for electricity and $0.010802 per therm for affiliated gas companies. Non-affiliated regulated gas companies pay $0.00329 per retail therm and $0.00041 per therm delivered to transport customers. Out-of-state electricity sales are excluded. Property outside the chapter’s replacement-tax system remains subject to ordinary county assessment and property taxes.

Sponsors & Cosponsors

Sponsor

  • REVENUE AND TAXATION COMMITTEE

    Affiliation unavailable

Cosponsors

  • Jeff Ehlers

    Republican • House

  • Doug Ricks

    Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 92 • No: 10

Senate vote • 3/18/2025

Senate Floor Vote

Yes: 31 • No: 3

House vote • 3/6/2025

House Floor Vote

Yes: 61 • No: 7

Actions Timeline

  1. Reported Signed by Governor on March 27, 2025 Session Law Chapter 188 Effective: 01/01/2026

    3/27/2025

  2. Delivered to Governor at 11:33 a.m. on March 21, 2025

    3/24/2025

  3. Returned Signed by the President; Ordered Transmitted to Governor

    3/21/2025Senate

  4. Signed by President; returned to House

    3/20/2025Senate

  5. Received from the House enrolled/signed by Speaker

    3/20/2025Senate

  6. Reported Enrolled; Signed by Speaker; Transmitted to Senate

    3/20/2025House

  7. Returned from Senate Passed; to JRA for Enrolling

    3/19/2025House

  8. Read third time in full – PASSED - 31-3-1

    3/18/2025Senate

  9. Read second time; filed for Third Reading

    3/14/2025Senate

  10. Reported out of Committee with Do Pass Recommendation; Filed for second reading

    3/13/2025Senate

  11. Introduced, read first time; referred to: Local Government & Taxation

    3/7/2025Senate

  12. Received from the House passed; filed for first reading

    3/7/2025Senate

  13. Read Third Time in Full – PASSED - 61-7-2

    3/6/2025House

  14. U.C. to hold place on third reading calendar one legislative day

    3/5/2025House

  15. Read second time; Filed for Third Reading

    3/4/2025House

  16. Reported out of Committee with Do Pass Recommendation, Filed for Second Reading

    3/3/2025House

  17. Reported Printed and Referred to Revenue & Taxation

    2/26/2025House

  18. Introduced, read first time, referred to JRA for Printing

    2/25/2025House

Bill Text

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