Taxpayers ‘brace for impact’ on Idaho Power refund

Officials across Washington County have a year to figure out how to pay for schools, cemeteries and other services while also refunding more than a million dollars to Idaho Power.

 Last week, the Washington County Commissioners voted unanimously to issue a $1.1 million tax credit in 2025 to Idaho Power after the Idaho Supreme Court ruled that the electric utility overpaid taxes in 2020, 2021 and 2022. The total includes interest, which stopped accruing after the county action.

 Idaho Power owns a huge amount of land and infrastructure in Washington County, including Brownlee Dam. The company pays three times more than the county’s next largest taxpayer.

 The current tax rates, which brought in $1.3 million in 2024, mean the credit will cover the vast majority of next year’s collections.

 “Terrible sandwich to eat any way you eat it,” Commissioner Lyndon Haines said. “But I think the credit route seems to make the most sense.”

 The county itself is responsible for the lion’s share, an estimated $747,873, as well as roughly $123,008 owed from county road and bridge funding and about $2,096 from rodent control.

 Commissioner Gordon Wilkerson wondered whether the county could have been better prepared.

 “When you’re in business in the cattle industry and you see something’s going to tank, you don’t go buy a new tractor,” he said.

 Treasurer Sabrina Young said county officials have been warning about the impending change for years and planning accordingly.

 On Monday the commissioners voted to use federal dollars to make up their shortfall. Washington County received $1 million from the federal government last year in “payments in lieu of taxes” on 341,025 acres. Federal holdings being tax exempt, so-called PILT funds are vital in places like Washington County, which is almost 40% public land.

 “This is not something that’s going to bankrupt us,” Haines said. “We’re going to be fiscally fine as much as it still hurts.”

 Taxpayers around Midvale and Cambridge however should “brace for impact,” he said. 

 Idaho Power represents an even bigger share of tax revenues for rural districts, which have tiny, finely balanced budgets that rarely can put much into savings. The taxes that now must be refunded are largely spent. The utility is owed an estimated $90,819 by the Midvale School District, $49,761 by the Cambridge School District and tens of thousands by cemetery districts and libraries. 

 “The little guy lost really, really bad to the big guy,” Haines said.

 Districts that cannot dip into savings or cut spending will be forced to use a judgment levy, shifting the burden to fellow taxpayers. Young said the refund must be complete within two years. 

 “This is not a reduction in tax collection whatsoever,” Idaho State Tax Commissioner Paul Woods said during a recent visit to Weiser. “This is just a shift of tax collection between taxpayers.”

 The commission lost in court when Idaho Power and fellow electricity provider Avista Corp. challenged how the state assessed taxes on “operating property” – things like rights-of-way, transmission lines and substations that cross county lines.

 The utilities argued they were unfairly paying more than railroads as the Idaho Tax Commission tried to comply with the federal Railroad Revitalization and Reform Act, or 4R Act. The law, passed to save a dying industry in 1976, requires states to provide tax relief to railroads, but the Idaho Supreme Court ruled that the state could simultaneously comply with both the federal law and the Idaho Constitution’s requirement to charge all taxpayers equally.