Real estate professionals are turning their eyes away from Boise, Idaho, where President Donald Trump is poised to sign an executive order that threatens to strip them of their tax benefits.
According to a statement from the Idaho House of Representatives, the move would strip state and local governments of the right to protect tax exemptions for properties they sell in the state.
The move comes after the U.S. House passed a $1.5 trillion tax overhaul bill that passed the Senate in January, but is awaiting approval by the Trump administration.
House Speaker Brian Cox has called the tax overhaul a “major job killer” for Idaho and called on lawmakers to pass a tax cut bill that gives Idaho residents more money to spend on things like housing.
The tax bill passed by the House last week has yet to receive any Democratic support.
The House bill would cut the state’s corporate income tax rate to 15% from 35%, cut the property tax rate by one-third, and cut the sales tax by five percentage points, among other provisions.
It also cuts the state sales tax to 3.5% from 6%.
But in an interview with the Idaho Statesman, Representative Dave Williams, a Democrat from Boise and a member of the House Ways and Means Committee, said the tax cuts should be more targeted and include more affordable housing.
He said that while the tax bill is “not a massive job killer,” he doesn’t think it’s good enough to remove incentives for buyers to move to Idaho.
“The question is, do you take away incentives from people that are already here, or are you taking away incentives that are going to help us get more people out of Boise?”
The Idaho House has previously voted to eliminate the state and federal inheritance tax deduction, which gives owners of inherited property a tax deduction that is refundable.
The estate tax deduction is also eliminated.
And Williams said the House would move to phase out the federal inheritance taxes for individuals and families.
“This is a huge tax break for Idaho,” Williams said, adding that he doesn: “I think it is an important opportunity to help families get ahead, not just buy an apartment.”
In December, the House passed the House version of a tax reform bill that included a $250,000 exemption for property taxes paid to state and county governments.
The bill passed the lower chamber on a 217-213 vote.
The Senate version would eliminate the exemption for local governments, but it is expected to pass the upper chamber in a vote later this week.
The Associated Press reported in February that Idaho had the third-highest estate tax burden in the country, after Louisiana and Tennessee.
The property tax deduction was a key component of the tax reform effort.
According the Brookings Institution, the tax deduction helps lower-income households and retirees avoid paying federal taxes by allowing them to deduct property taxes from their federal income taxes.
The deduction also reduces the amount of taxes owed by the wealthy and corporations by a larger amount than the income tax deduction.
Idaho’s congressional delegation, including two Democrats, are expected to vote against the House’s version of the bill in its current form.