MOSCOW, ID – An Idaho judge has found in favor of Latah and Lincoln Counties in an appeal to fairly and equitably apply homeowner property tax exemptions. According to a press release, the case involved prorating property taxes when non-owner-occupied properties, which were not eligible for the exemption, were sold or converted into owner-occupied properties sometime during the tax year.
In the case of Latah and Lincoln Counties vs. the Idaho State Tax Commission, regarding proration of the homestead (homeowner’s) exemption on newly owner-occupied primary residence properties, Judge Adam H. Green issued a Memorandum Decision and Order yesterday.
Latah and Lincoln Counties granted the homeowner’s exemption “…upon the date of the application…” as provided in the law and prorated property taxes accordingly. Latah County pursued this case because proration of the exemption is the fairest and most equitable application of that law. The Court agreed, finding that the legislative intent of the law was to prorate the homeowner’s exemption on the date that the property became eligible.
From Latah County:
The Idaho State Tax Commission had previously ordered Latah and Lincoln Counties to stop prorating and grant the homeowner’s exemption for the entire year, even though the property was not eligible for the exemption until the date it was converted to an owner occupied, primary dwelling. By way of example, a property that was a rental for 360 days of the year, and not eligible for the homeowner’s exemption, was sold to a buyer that occupied it as their primary dwelling for only 5 days. Under the State Tax Commission order, the homeowner’s exemption would have been granted for the entire year, even though the property was not eligible for 360 days of that year. The result would be to provide a tax windfall to the purchaser of the property, to the detriment of the seller and the local governments in that taxing district.
Judge Green ruled that the Idaho State Tax Commission exceeded its authority by ordering Latah and Lincoln Counties to cease prorating the homeowner’s exemption, and also found that House Bill 562 (2020) intended for the homeowner’s exemption to be prorated.
Latah County wishes to thank the Idaho Association of Counties for their support of our petition.
