Latah County and the Idaho State Tax Commission head back to court for a status conference Thursday, in a case that could affect millions of dollars in property valuations across the state.
The lawsuit deals with Idaho’s homeowner exemption, which reduces the taxable value of an owner-occupied home by $125,000 or 50%, whichever is less.
Taxable values are used to calculate an individual’s property tax bill, so the timing and amount of the exemption directly affects what they own.
In 2020, the Legislature amended the law to allow homeowners to apply for the exemption at any point during a year. At the same time, they added language saying the exemption “shall be effective upon the date of application.”
Latah County believes that means the exemption should be prorated, so homeowners only get a portion of it based on the date of their application.
The tax commission disagrees. It says the full exemption should be granted, beginning in whatever tax year someone first applies.
Latah County and Lincoln County are the only two counties in the state that prorate the exemption. The tax commission recently ordered them to stop. Both subsequently filed lawsuits asking that the commission’s order to be stayed and requesting judicial review of the matter.
In other words, they want the court to decide which interpretation of state law is correct.
After spending the last month hashing out some procedural differences, Latah County and the tax commission recently asked 2nd Judicial District Administrative District Judge Gregory FitzMaurice to rule on two issues: Did the 2020 bill provide for prorating of the homeowner’s exemption, and did the tax commission exceed its authority when it ordered the counties to stop prorating?
The parties also asked that Lincoln County’s lawsuit be combined with Latah County’s, since both raise substantially similar questions.
FitzMaurice will hold an online status conference in the case at 9 a.m. Thursday.