First posted on BoiseDev.com Nov. 10Micron Technology is one of Idaho’s largest employers, but it only pays property taxes on a fraction of its taxable value. The reason? An unsuccessful attempt to lure a nuclear company to East Idaho during the Great Recession.
The company paid $4.75 million in property taxes in 2019, only 23% of what it would owe if the semiconductor company’s property was taxed at its full value, according to records from Ada County. In 2011, The State of Idaho capped the taxable value of Micron’s property at $400 million – forever. But over time, the actual value of its property rose to $1.86 billion last year.
While Micron has been enjoying one of the largest tax breaks in the state, Idahoans are struggling with the burden of skyrocketing property values compounding with years of tax increases. In Ada County, Boise officials voted this summer not take any base increase to property tax collections in 2020 after sixteen straight years of voting to increase taxes the maximum allowed under the law. The Ada County Commission, which is contending with a laundry list of capital needs to keep up with regional growth, took foregone taxes in 2019 toward a new coroner’s office, a jail expansion and a second driver’s license location. And at the statehouse, the debate on how to reform the property tax system continues to rage without much progress.
This hefty tax break for Micron wasn’t part of the plan.
In 2008, the Idaho State Legislature passed a set of tax breaks meant to lure French nuclear company Areva Inc. to build a uranium enrichment facility near Idaho Falls. The law said if any company invests at least $1 billion into Idaho within seven years, the state would cap its property tax value at $400 million permanently.
But, Areva never came and the U.S. Nuclear Regulatory Commission terminated the company’s license to build in 2018.
Meanwhile, Micron invested in the necessary improvements to qualify for the tax exemption and claimed the $400 million taxable property cap in 2011. This is the second time the tech giant claimed a tax break from the Idaho State Legislature. In 2005, Idaho awarded the company a tax valuation cap of $800 million, half of what Idaho offered to lure Areva.
If Micron’s property tax cap stayed at $800 million, the company would have paid $9.5 million in 2020. Without any cap at all, the company would have paid $20.32 million. This is millions higher than the $4.749 they paid this year with the current exemption.
Micron claiming the exemption is fully within the bounds of the law. A company spokeswoman did not comment on it in an email to BoiseDev.
Cap questioned by some legislatorsAt the Senate’s Local Government and Taxation Committee hearing on the bill in 2008, some legislators opposed the tax break saying it was unfair tax policy. Sen. Joe Stegner, R-Lewiston, said passing the lower cap for Areva would be unfair to Micron.
“This company has been in Idaho 20 years and has provided jobs and paid taxes and then a new company comes in and gets a $400 million cap,” Stegner said, according to the minutes from the March 12, 2008 meeting. “What happens when Micron comes in next year and requests a $400 million cap?”
When Micron got the lower cap on its property tax value in 2011, its property’s market value was roughly $755 million. It increased nearly every year to the 2019 market value of $1.86 billion. But at the same time, the taxes Micron paid decreased due to a 2016 change pushed through the Idaho legislature that shifted the property tax burden from commercial to residential property. The company paid $7.316 million in taxes in 2011 and only $6.073 million in 2018.
The exemption on two parcels owned by Micron is Ada County’s single largest deduction. Its value is behind only the 125,770 parcels with a homeowner’s exemption and the nearly 4,000 parcels classified as agricultural.
Put another way, a taxpayer with a…