March 3, 2023

2 Min Read
Idaho Legislature Considers Bill to Change Tax Assessment of Self-Storage, Other Commercial Properties

The Idaho legislature will discuss a bill designed to change the way assessors determine taxable value for self-storage properties and some other commercial assets including assisted-living facilities, car washes, gas stations, hotels and nursing homes. The measure would remove “intangible value” from being used in the calculation and allow property owners to request an itemized explanation of how an asset’s value was determined.

The bill would effectively prevent tax assessors from assigning a value based only on the metrics from the subject property and require them to compare similar asset types based on age and other factors such as occupancy and rental rates. It would remove “intangible” factors, such as brand value, from the equation, according to the source.

The bill has not been formally introduced. Its provisions were filed in a “routing slip,” which is common for identifying draft legislation but prohibited from being published online. Its language reportedly removes controversial items—including capping tax value and defining “special purpose commercial property”—that were part of another bill under consideration but strongly opposed by assessors throughout the state.

Rep. Dustin Manwaring, who authored both bills, pulled the original measure when it was sent back to the House Revenue and Taxation Committee earlier this week and replaced it with the new draft. Two senior members of the Ada County Assessor’s Office recanted that office’s previous objections when they heard the new language, the source reported. The Ada office had called portions of the first measure “unconstitutional” and said it would create a new tax exemption for some property types.

Brad Smith, Ada County’s chief deputy assessor, indicated support for the new bill, though he told the source that assessors already account for market comparables when calculating value. “We do look at all storage facilities. We group them together, and we’re looking at market occupancy and market rents,” Smith said. “We’re not just looking at the rent or the occupancy [of one property]. We’re looking at market rents and market occupancy.”

Last year, Gov. Brad Little vetoed a bill supported by the Idaho Self Storage Association that would have required county assessors to use a cost approach in determining the taxable value of self-storage properties. In his objection, Little indicated he was uncomfortable applying a different standard to self-storage than other commercial property types.

Boise Dev, ‘Compromise’: New Version of Self-Storage Unit Tax Bill Gets the Approval of Ada Assessor, Moves to House Floor
Idaho Legislature, House Bill 100

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