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Department of Taxation and Finance

Survey of Railroad and Utility Taxation Practices Among the States: 2005 Update


1. Basis for taxation:

Ad valorem, except for REA electric properties which are taxed at 3.5% adjusted gross receipts in lieu of ad valorem taxation.

2. Property subject to taxation:

Taxable:     All railroad and utility realty and personalty.

Exempt:     Merchandise for resale, pollution device, irrigation property, and intangible personalty.

3. Classification (if applicable):


4. Level of government which determines basis for tax liability - ad valorem property tax:

State Tax Commission is vested with the authority to impose and collect property taxes and the administration of the electricity tax. Public Utilities Commission is vested with regulatory duties concerning public utilities. State Board of Equalization can determine whether property is used in RR operation or unnecessary to maintenance and operation of RR. Operating property is assessed by the Board; non--operating property is assessed by county assessor.

5. Report filing and valuation method(s) required by statute for ad valorem taxation:

Companies are required to report data pertinent to valuation by each of the three approaches to value. Every public utility must file an annual report, listing property inventories, revenue statements, etc. with the State Tax Commission. Also, utilities must pay a special regulatory fee. Commission has no means to enforce reporting (except to place very high value on property). There are no regulations or statutes governing valuation methodology, other than that only one method may be used on a given property.

6. Practical application of valuation method(s):

Valuation approach used is according to the judgment of the appraiser. With regulated utilities, original cost tends to be used. With telecommunications companies, RCNLD is used when data are available.

7. Valuation treatment of large facilities such as power plants, dams, or rail yards:

There are no special provisions for valuing these facilities.

8. Apportionment method(s) required by statute:

 None, other than that appraiser should use methodology that is reasonable and proper.

9. Practical application or apportionment requirements:

To the state - Generally use Western States Manual process (based on miles of track, line, etc) with on-site valuation of items like microwave transmitters, which do not use lines.

Among local units - Apportionment is done by miles of track, line, etc., except for power companies which are done by location. Value per mile of electric transmission line and distribution line is determined by dividing the total value within each location by the number of miles of such line within said location, and all operating property shall be assessed and apportioned to the location in which it is situated. The value per mile of RR line is determined by apportionment of the total value within the state. The apportionment shall be based 20% on the ratio of line miles in the state to line miles in the county; 40% on the ratio of net ton miles in the state to net ton miles in the county and 40% on the ratio of station revenues in the state to station revenues in the county. The apportionment for cities, school districts, and other taxing districts shall be the same as apportionment among the counties. If the property is of such a nature that cannot be reasonably apportioned on the basis of rail, wire, pipeline mileage, such as microwave and radio relay stations, the tax commission may adopt such other method or basis of apportionment as may be feasible and proper.

10. Apportionment treatment of large facilities such as power plants, dams, or rail yards:

If part of an operating system, property is valued according to procedures explained in #9.

11. Description of assessment appeals system:

First level is informal, with commissioner and staff. Further appeals are heard with State Board of Equalization. If still dissatisfied, plaintiff may appeal to state district court.

12. Status of deregulation/restructuring of electric generating and impact on valuation and apportionment methods used:

There is currently no discussion of deregulating electrical utilities or divestiture of generating stations. Valuation and apportionment methods have not been affected.

13. State Government Staffing:

Staff consists of six employees (full-time equivalent basis).

Law Source(s):     Idaho Constitution and Code, Chapters 113, 114, 114a, 202, 202a plus 700, 800, 3200 series (Exemptions under Chapters 105-107)

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