A wind farm in Power County, Idaho, is depicted in this file photo. (Courtesy of the U.S. Department of Energy)
The Idaho Legislature’s House Revenue and Taxation Committee introduced a new bill Monday that goes “gangster” on wind energy projects in Idaho.
The House Revenue and Taxation Committee on Monday voted unanimously to introduce House Bill 317, which lays out a path to create and collect a new excise tax on commercial wind turbines in Idaho.
If passed into law, the bill requires county commissioners to prepare a ballot question for voters in the county where a new commercial wind project would be built. If a majority of county voters do not approve the proposed wind farm at the next election, county commissioners are required to immediately enact an ordinance establishing a new countywide excise tax on commercial wind turbines.
An excise tax is imposed on certain goods, services and activities, according to the Internal Revenue Service. People that pay excise taxes include importers, manufacturers, retailers and consumers, and costs can vary depending on the specific tax.
During the bill’s introductory hearing at the Idaho State Capitol in Boise, Republican Rep. Ted Hill of Eagle asked the question on everyone’s mind.
“How big is that excise tax?” Hill asked. “Are we going to go gangster on it and really make it hardcore? That’s what we want to hear.”
The answer was yes.
How would House Bill 317 affect the costs of wind turbine projects in Idaho?
The tax would be equal to $25,000 for every foot of height for any commercial wind turbine with a minimum height of 100 feet.
That means developers of a commercial wind farm would have to pay a $2.5 million excise tax for every 100-foot-tall wind turbine that is included in a project.
The bill defines height as the distance measured from the base of the turbine to the highest point of the blade at its maximum vertical position.
Many wind farms include dozens or hundreds of turbines.
For context, the proposed Lava Ridge Wind Project outside of Twin Falls would include 231 turbines with a maximum height limit of 660 feet for turbines. If each of the 231 Lava Ridge turbines was built exactly 100 feet high, the excise tax would be $577,500,000. If the turbines were each 600 feet high, the tax would be nearly $3.5 billion.
“For the benefit of the committee, that qualifies as ‘gangster’ in the eyes of the chairman,” Chairman David Cannon, R-Blackfoot, said.
Money collected from the new excise tax would be used to pay for tax refunds authorized by the Idaho State Tax Commission, as well as a fund to pay for school district facilities.
Rep. Jeff Ehlers, a Republican from Meridian, sponsored the bill. Ehlers told legislators he chose the mechanism of an excise tax because the tax could still be collected if a wind farm was built on federal public lands.
Rep. Steve Berch, D-Boise, voted to introduce the new bill but expressed concern with how far the bill goes.
“I must say that I’m concerned about the notion of taxing the free market out of the ability to do things that are legal, and I’m concerned about the precedents that this might set in other areas as well,” Berch said Monday.
Rep. Charlie Shepherd, a Republican from Pollock who made a motion to introduce the bill said, “We’ve never seen anything like it before.”
Monday’s hearing was only an introductory hearing, which does not include public testimony>
Introducing House Bill 317 clears the way for it to return to the House Revenue and Taxation Committee for a full public hearing.
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